Development Finance in Barnet
Funding for Ground-Up Construction, Conversions & Major Refurbishments
Access competitive development finance from over 100 specialist lenders. Up to 70% loan-to-cost, rates from 0.65% per month, with decisions in 24 hours.
What is Development Finance?
Development finance is a specialist form of property funding designed to support construction, conversion, and major refurbishment projects. Unlike a traditional mortgage where the full loan amount is advanced at completion, development finance is released in stages -- known as drawdowns -- as building work progresses. This staged approach protects the lender by ensuring funds are only released against verified construction milestones, while providing developers with the capital they need precisely when they need it.
For property developers working across the London Borough of Barnet, development finance is the cornerstone of project funding. Whether you are constructing new homes in Finchley, converting commercial premises in Hendon, or undertaking a luxury refurbishment in Totteridge, development finance provides the structured funding framework your project requires. Barnet's diverse property market -- ranging from high-density urban developments to exclusive detached homes -- means lenders assess each scheme on its individual merits, considering location, planning status, build costs, and the projected end value.
As specialist development finance brokers, we understand the Barnet property landscape intimately. We know which lenders are most competitive for different project types in specific locations across the borough, from the prime addresses of Mill Hill and High Barnet to the regeneration opportunities in Edgware and Colindale. Our access to over 100 lenders means we can source the most competitive terms for your specific project, whether it is a straightforward three-unit scheme or a complex mixed-use development.
Types of Development Finance
Development finance can be structured in several ways depending on the leverage required and your equity position.
Senior Development Finance
Senior debt is the primary layer of development finance, secured by a first charge over the property. It typically covers up to 65-70% of total project costs (loan-to-cost) and up to 60-65% of the gross development value (GDV). Because the lender holds the first charge, senior debt carries the lowest risk and therefore offers the most competitive rates, usually starting from 0.65% per month.
- First charge security position
- Up to 70% loan-to-cost
- Rates from 0.65% per month
- Most competitive terms available
- Suitable for experienced and first-time developers
How Development Finance Works
From initial enquiry to successful exit, here is the typical development finance journey for Barnet projects.
Application
Submit your project details including land costs, build costs, projected GDV, and planning status. We review your proposal within 24 hours.
Valuation
An independent RICS surveyor conducts a site inspection and residual valuation to confirm the project GDV and build cost estimates.
Drawdown
Initial funds are released to cover land acquisition. Subsequent tranches are drawn against a pre-agreed schedule as construction progresses.
Monitoring
An independent monitoring surveyor inspects the site before each drawdown, certifying that works match the build programme and budget.
Exit
On completion, the loan is repaid through sales, refinance onto a term loan, or a combination. We help plan your exit strategy from day one.
Key Lending Parameters
Typical terms available for development finance projects across the London Borough of Barnet.
Up to
70%
Loan to Cost
Up to
65%
Loan to GDV
From
0.65%
Monthly Rate
Months
6-36
Loan Term
What Projects We Fund
We arrange development finance for a wide range of property projects across Barnet and North London.
New Build Residential
Ground-up construction of houses, flats, and apartment blocks across Barnet. From single plots to 100+ unit schemes.
Conversion Projects
Converting commercial buildings, offices, or retail units into residential dwellings under permitted development or full planning.
Heavy Refurbishment
Structural renovation works including extensions, loft conversions, basement excavations, and full internal reconfiguration.
Mixed-Use Developments
Combined residential and commercial schemes such as flats above retail, live-work units, and community hub developments.
Commercial Development
Purpose-built commercial space including offices, retail units, industrial, and trade counter developments across North London.
Land with Planning
Acquisition finance for land parcels with planning permission, allowing you to secure sites before starting construction.
Eligibility Requirements
Development finance lenders assess both the project and the borrower. While each lender has specific criteria, the following general requirements apply to most development finance applications in Barnet.
Do not be discouraged if you do not meet every criterion perfectly. Our access to over 100 lenders means we can often find a solution even for non-standard situations. First-time developers, borrowers with complex structures, and projects requiring higher leverage are all considered on a case-by-case basis.
What Lenders Look For
- Minimum project size of £150,000 (no maximum)
- Full or outline planning permission in place (or permitted development)
- Experienced developer or strong professional team
- Clear exit strategy (sales, refinance, or retention)
- Equity contribution of at least 30% of total project costs
- Detailed build cost schedule from a qualified QS or contractor
- Clean credit history preferred (adverse considered case-by-case)
- UK-based SPV or limited company structure
The Capital Stack Explained
Understanding how different layers of funding work together is key to structuring an efficient development finance package. Here is a typical capital stack for a Barnet development project.
Your cash or land contribution. The foundation of the capital stack.
Second charge loan. Higher cost but reduces your equity requirement.
First charge development loan. The largest and most competitive layer.
How the Capital Stack Works
The capital stack describes how a development project is funded from multiple sources. Each layer carries a different level of risk and return, with senior debt being the most secure position (first to be repaid) and equity bearing the most risk (last to be repaid, but capturing the profit upside).
For a typical Barnet development project costing £2,000,000, the capital stack might look like this:
By combining senior debt with mezzanine finance, the developer's equity requirement is reduced from 35% to just 15% of project costs.
Development Finance vs Bridging vs Mezzanine
Not sure which product is right for your project? Here is how the three main property finance options compare.
Purpose
Typical LTC / LTV
Rates From
Term
Drawdown
Security
Monitoring
Best For
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Recent Development Finance Case Studies
Real examples of development finance deals we have arranged across the London Borough of Barnet.
Finchley, N3
8-Unit New Build in Finchley
A developer acquired a disused commercial plot with planning permission for 8 two-bedroom apartments. We arranged senior development finance at 65% LTC, enabling the developer to retain sufficient equity for contingency reserves.
Land Cost
£1,200,000
Build Cost
£1,600,000
GDV
£4,200,000
Loan Amount
£1,820,000
LTC
65%
Rate
0.70% pm
Outcome
All 8 units sold within 3 months of completion. The developer achieved a net profit of approximately £820,000 after all costs and interest.
Hendon, NW4
Office-to-Residential Conversion in Hendon
An experienced developer identified an obsolete office block suitable for conversion into 12 flats under permitted development rights. We secured a blended facility combining senior debt with mezzanine finance to minimise the equity requirement.
Land Cost
£950,000
Build Cost
£1,100,000
GDV
£3,400,000
Loan Amount
£1,640,000
LTC
80% (blended)
Rate
0.85% pm (blended)
Outcome
Conversion completed on schedule. 10 units sold off-plan and 2 retained as buy-to-let investments. Developer profit exceeded £700,000.
Totteridge, N20
Luxury Detached Home in Totteridge
A bespoke developer specialising in high-end homes planned a single luxury property on a prime Totteridge plot. We arranged development finance at a competitive rate given the strong location and high GDV per unit.
Land Cost
£2,500,000
Build Cost
£1,800,000
GDV
£6,500,000
Loan Amount
£3,010,000
LTC
70%
Rate
0.68% pm
Outcome
The completed property was sold for £6,750,000, exceeding the original GDV estimate. Developer achieved a net profit of over £1.5M.
Explore Our Other Finance Solutions
Development Finance FAQ
Answers to the most common questions about development finance in Barnet.
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