Typical Projects:
Substantial conversions, structural redevelopment and construction
Bridging & Development / HMO Development Finance
Development finance for building the project not just buying the site.
Specialist funding for substantial HMO conversions, redevelopment and construction projects where finance may be released as work progresses.
A development loan needs to support the full project from acquisition or current value through to completion and exit.
That means understanding the build costs, professional team, planning position, borrower contribution, timetable, contingency and completed value before the lender commits.
We help bring those elements together into a fundable development proposal.
Four Quick Information Points.
Funding Structure:
Initial advance followed by staged development drawdowns
Key Assessment:
Experience, build costs, borrower contribution and completed value
Typical Exit:
Sale, long-term HMO refinance or another evidenced repayment route
Unlike a standard mortgage, development finance may be released in stages after the lender’s monitoring surveyor confirms that specified work has been completed.
The borrower therefore needs enough liquidity to manage the project between drawdowns.
We review the development as a complete financial route from acquisition and first works through to final repayment.
Development Funding
Finance for substantial HMO projects.
HMO development finance may be considered for projects involving:
• Major residential-to-HMO conversions
• Structural alterations
• Large-scale reconfiguration
• Commercial-to-HMO conversion
• New-build HMO accommodation
• Extensions forming part of a wider project
• Redevelopment of an existing site
• Conversion into large or specialist shared accommodation
• Part-completed developments
• Replacing an existing development facility
Lenders May Assess:
• Purchase price or current site value
• Planning permission
• Development appraisal
• Schedule of works
• Build and professional costs
• Borrower contribution
• Development experience
• Contractor experience
• Project timetable
• Contingency
• Gross development value
• Expected rent
• Exit strategy
Funding the Build
The timing of the money matters as much as the total facility.
A development facility may show enough money overall while still creating pressure during the build.
Funds for work are commonly released in arrears after a monitoring surveyor confirms progress. This can mean the developer must pay for work before receiving the next drawdown.
We examine:
Initial advance
Borrower equity required
Day-one costs
Timing of staged releases
Maximum loan against cost
Maximum loan against completed value
Interest retained within the facility
Monitoring-surveyor fees
Minimum cash required between stages
Contingency and cost overruns
A workable facility must fund the project in practice, not only balance on a spreadsheet.
Where the intention is to retain and refinance, the finished property must be suitable for the proposed term lender.
That may involve assessment of:
▪ Final room count
▪ Completed layout
▪ Planning use
▪ HMO licence
▪ Property condition
▪ Market rent
▪ Valuation approach
▪ Landlord experience
▪ Ownership structure
▪ Portfolio position
▪ Amount required to repay the development loan
Projected value and rent are assumptions until independently confirmed. The project should include enough resilience for a lower value, higher costs or a delayed exit.
Questions We Regularly Help Solve
Helping developers connect the funding with the build programme.
1Q How much of the development cost can be financed?
The amount depends on the lender, site value, total costs, completed value, borrower contribution and experience.
2Q Will the lender release all the money upfront?
Usually not for substantial development work. Development funds are often released in stages following monitoring-surveyor inspections.
3Q Do I need planning permission before applying?
Many development lenders expect satisfactory planning permission before completion, although some cases may involve a separate planning or bridging route.
4Q Can a first-time developer obtain HMO development finance?
Potentially. The strength of the proposal, professional team, contractor, borrower contribution and relevant experience will be important.
5Q Can interest be added to the development loan?
Potentially. Interest may be retained within the facility, which reduces the amount available for other project costs.
6Q Can the completed development be refinanced onto an HMO mortgage?
Potentially, subject to the final property, rent, value, licence, planning and borrower meeting term-lender criteria.
Browse more FAQs →
Who We Help
Development funding for different levels of HMO experience.
Experienced HMO Developers
Completing substantial conversion or redevelopment projects.
Property Developers Entering HMOs
Applying established development experience to a shared-accommodation project.
Portfolio Landlords
Developing new or existing assets as part of a wider portfolio strategy.
Limited Companies and SPVs
Undertaking development through an accepted corporate structure.
Joint-Venture Projects
Funding proposals involving more than one investor or project partner.
First-Time Developers With Strong Teams
Projects supported by experienced contractors, consultants and professional advisers.
Why Clients Choose Us
Because the facility must match the real project, not the optimistic version of it.
Clients value:
• Specialist HMO and development finance knowledge
• Clear assessment of project costs and borrower contribution
• Staged funding explained before commitment
• Interest and fees included within the full appraisal
• The exit considered alongside the development loan
• Realistic discussion of value, rent and timing risk
• Coordination with lenders, valuers, solicitors and professional teams
• Honest feedback where more preparation or contingency is needed
The aim is not simply to obtain a development facility. It is to structure one capable of reaching completion and repayment.
Educational Resources
HMO development knowledge hub.
Browse through our insights and resources.
A Practical Guide to HMO Development Finance
View GuidePreparing an HMO Development Finance Application
Read ArticleHow Staged Development Drawdowns Work
Read articlePlanning a substantial HMO conversion or development?
Send us the site details, planning position, schedule of works, project costs, experience and proposed exit. We will help you assess the available development finance routes.