Property Development Finance for a Five-Home Development

This case study shows how we helped a first-time developer unlock cash from an unencumbered development site before securing a development finance facility to build five new homes.

The Challenge

Our client owned a development site outright with planning permission for five houses.

Although the site had significant value, the client urgently needed to release cash to support another business venture. Their immediate objective was to raise funds against the land while continuing to progress plans for the residential development.

The longer-term strategy was to secure planning improvements for larger homes before moving ahead with construction.

The transaction presented several challenges:

• The client was a first-time developer.
• No ground investigation reports had been completed when the initial funding was required.
• The client wanted to use an existing project manager rather than appoint a main contractor under a fixed-price JCT contract.
• Funding was needed quickly to meet the client’s cashflow requirements.

Many traditional development finance lenders would have viewed these factors as too high risk.

Our Solution

Positive Commercial Finance sourced a lender willing to take a pragmatic and commercially focused approach.

The lender agreed to provide a Land Loan against the site before the ground investigation reports had been completed, allowing the client to release capital quickly.

Once the investigations were available and the planning uplift had been achieved, the same lender provided a Property Development Finance facility to support the construction of the five new homes.

This approach gave the client immediate access to cash while ensuring long-term funding was already in place for the development phase.

Deal Structure

Land Loan

• Loan to Value (LTV): 50%

Development Finance

• Loan to Gross Development Value (LTGDV): 65%

Facility Terms

• Interest Rate: 1.25% per month
• Arrangement Fee: 2%
• Exit Fee: 1%
• Term: 12 months

The Outcome

The client successfully released capital from their development site when it was needed most, providing valuable support for their wider business activities.

Once the necessary reports were completed and planning improvements secured, the development finance facility was activated, allowing the project to move forward.

This case study demonstrates how flexible Property Development Finance can help first-time developers unlock land value, overcome early-stage challenges and progress residential developments that may not fit standard lending criteria.