Packaging development finance deals lenders can underwrite quickly

Development finance is unforgiving of a thin application. Unlike an investment mortgage, where the lender is largely assessing an existing asset and an existing income, a development deal asks a lender to underwrite a project that doesn't exist yet: a build cost estimate, a future value, a planning position, and a developer's ability to deliver all three on time and on budget. If any of that arrives incomplete or inconsistent, the deal stalls in credit. Not because the lender is being difficult, but because the numbers don't yet support a decision.

The three numbers everything else hangs off

Gross development value, total build cost, and the borrower's own contribution are the backbone of any development finance case. Get these wrong, or present them without evidence, and everything downstream, loan-to-cost, loan-to-GDV, the lender's exit assumptions, is built on sand. Lenders will form their own view of GDV rather than take a developer's figure at face value, but a well-supported figure from the outset speeds up that process rather than replacing it.

Gross development value

GDV needs to be evidenced with comparable sales, not a single agent's estimate pulled together for the loan application. Recent, genuinely comparable sales in the immediate area, adjusted for specification and unit mix, carry far more weight with an underwriter than a headline valuation figure with no supporting detail. Where the scheme includes unit types not well represented locally, new-build flats in an area of mostly period conversions, for example, flag that explicitly rather than letting the lender's valuer discover the gap unprompted.

Build costs

A build cost figure needs a source: a quantity surveyor's cost report, a fixed-price building contract, or at minimum a detailed contractor's quote broken down by trade. A single round-number estimate from the developer, without a breakdown, is one of the most common reasons development cases sit in credit longer than they should. Lenders will also want to see a contingency line, typically expressed as a percentage of build cost, and will ask what happens to that contingency, and to the schedule, if costs run over.

Borrower contribution and track record

Lenders want to know where the developer's own money is coming from and whether it's already committed, not aspirational. They'll also want evidence of relevant experience, completed schemes of a similar type, scale and location, because development lending is as much an assessment of the person delivering the project as of the project itself. A first-time developer isn't automatically declined by every lender, but the application needs to say so plainly and address it, rather than let an underwriter discover the borrower's inexperience partway through due diligence.

Planning status: be precise, not optimistic

Planning status needs to be stated exactly as it stands, with the relevant local authority reference and decision documents attached, not summarised loosely as 'planning in place' when what's actually in place is an outline consent with conditions still to be discharged. Lenders draw a real distinction between full planning permission, outline permission, permission subject to a Section 106 agreement, and permitted development rights, and each changes both the risk profile and which lenders will even consider the deal. Local planning authority decisions are a matter of public record, so any inconsistency between what the application states and what the planning portal shows will surface quickly. The same principle applies to the corporate record; our guide to using Companies House data shows how to bring it into the application process rather than re-keying it later.

Where conditions remain to be discharged, list them and give a realistic view of timing and who's responsible for discharging them. A lender who understands exactly what stands between the current position and an unconditional consent can price and structure around that risk. A lender who discovers an unresolved condition midway through legal work cannot, and the deal slows or falls over.

Drawdown structure and monitoring

Development finance is drawn in stages against certified work, not released as a single lump sum, and most lenders appoint an independent monitoring surveyor to certify progress before each drawdown. Setting out a proposed drawdown schedule against your build programme in the initial application, even in outline, signals that the developer and broker understand how the facility will actually operate, and gives the lender a framework to sense-check rather than build from scratch.

• GDV supported by genuinely comparable, recent sales evidence
• Build cost broken down by trade, with a stated contingency percentage
• Planning status stated precisely, with reference numbers and any outstanding conditions listed
• Borrower contribution shown as committed funds, with source evidenced
• Draft drawdown schedule aligned to the build programme
• Developer track record on comparable schemes, addressed directly if limited

Why this belongs in the pack from day one

A recurring pattern on slow development cases is that the numbers arrive in stages: an initial rough GDV, then a revised one after the valuer's first look, then a build cost that changes once the QS report lands. Each revision resets part of the underwriter's assessment. Packaging the deal properly the first time, along the lines set out in our broader guide to what lenders want in an application pack, means fewer of these resets and a materially shorter path from submission to offer.

It also affects which lenders you approach at all. Development finance appetite varies more sharply between lenders than most other product types. Some won't touch ground-up schemes, some cap loan-to-GDV well below others, some won't lend to a developer without at least two completed schemes. Knowing this in advance, through a well-maintained lender panel, saves you packaging a strong deal and sending it to a lender who was never going to say yes.

Development finance rewards precision. A GDV and a build cost with sources attached will always move faster through credit than a confident-sounding round number.

Keeping the paperwork under control

A single development case can generate dozens of documents: QS reports, planning decisions, building contracts, insurance evidence, professional indemnity cover for the design team, and revisions to most of these as the deal progresses. Version control matters here more than on most deal types. Sending a lender an outdated build cost schedule after the QS has revised it is a common and entirely avoidable source of delay. A structured document management system, where the latest version of each document is clearly current and superseded versions are retained rather than lost, removes a surprising amount of friction from what is already a document-heavy process.

Building the pack itself in a consistent structure, rather than reassembling it from scratch for every deal, is what a dedicated application pack builder is for: the same fields and evidence requirements every time, so nothing depends on one broker remembering what a particular lender likes to see.

Exit strategy deserves the same rigour as entry

Development finance is typically short-term, and the lender's underwriting will pay close attention to how the facility is expected to be repaid: sale of the completed units, refinance onto a term facility, or a mix of both. A vague statement that units will be 'sold on completion' isn't sufficient. Lenders want to see the assumptions behind that exit tested against the GDV evidence and against realistic sales timescales for the local market. Where the exit is a refinance rather than a sale, the application should address whether the completed scheme is expected to meet a term lender's criteria, since a scheme that's easy to fund at development stage isn't automatically easy to refinance once built.

It's also worth setting out what happens if the exit is delayed, whether that's a slower sales period than forecast or a delay in refinance approval. Lenders will ask this question in credit committee even if the broker doesn't raise it first, and an application that already addresses extended timescales, additional interest cost, and any contractual extension terms tends to be viewed as a more carefully considered proposition than one that assumes everything goes to plan.

Insurance is another area that gets overlooked until late in the process. Lenders will expect to see contract works cover in place from the start of the build, adequate professional indemnity cover for the architect and any structural engineer, and confirmation that cover levels are appropriate to the rebuild cost rather than the purchase price. Gathering this evidence alongside the rest of the pack, rather than treating it as a condition to satisfy after offer, removes another common source of last-minute delay.