The UK development finance lender landscape
The UK development finance market has over 100 active lenders ranging from clearing banks to family offices. Each has different criteria, pricing, speed, and appetite. Choosing the right lender for your specific scheme is one of the most important — and most underrated — parts of the process. Approaching the wrong lender wastes weeks and can damage your credibility.
Clearing banks
Who: Lloyds Banking Group (including Bank of Scotland), NatWest, HSBC, Barclays, Santander.
Typical terms: Rates 7–10% pa. Arrangement fees 1–1.5%. LTGDV cap 55–65%. Minimum loan typically £3–5m. Require proven track record (3+ completed schemes) and strong personal net worth.
Best for: Experienced developers with larger schemes (£5m+ GDV) and conservative leverage requirements. The cheapest option if you qualify.
Watch out for: Slow decision-making (credit committees meet monthly or fortnightly), rigid criteria, limited appetite for first-time developers or non-standard schemes.
Challenger banks
Who: OakNorth, Shawbrook, Hampshire Trust Bank, United Trust Bank, Masthaven, Aldermore, Cynergy Bank.
Typical terms: Rates 9–13% pa. Arrangement fees 1–2%. LTGDV up to 65–70%. Minimum loan typically £500k–£1m. More flexible on borrower experience.
Best for: The sweet spot for most SME developers. Mid-range pricing with more flexibility on criteria than clearing banks. OakNorth in particular has built a strong reputation for speed and pragmatic credit decisions.
Watch out for: Some challengers have pulled back from development lending periodically. Check that the lender is actively lending before investing time in an application.
Specialist funds
Who: Atelier Capital, Silbury Finance, Blend Network, Fortwell Capital, Puma Property Finance, Avamore Capital, and many more.
Typical terms: Rates 10–15% pa. Arrangement fees 1.5–2.5%. LTGDV up to 70–75%. Minimum loan typically £250k–£1m. Often willing to fund first-time developers.
Best for: Deals that don't fit bank criteria — first-time developers, higher leverage, unusual assets, tight timelines. Funds can often make decisions in days rather than weeks.
Watch out for: Higher costs (rates + fees can add up significantly). Some funds have limited track records themselves. Check who is actually providing the capital and what happens if the fund faces liquidity issues.
Peer-to-peer and crowdfunding platforms
Who: CrowdProperty, Kuflink, Invest & Fund, proplend.
Typical terms: Rates 9–14% pa. Arrangement fees 1–2%. LTGDV up to 65–70%. Loan sizes typically £200k–£5m.
Best for: Smaller, straightforward residential schemes. Some platforms have very efficient online processes and can move quickly.
Watch out for: Funding is subject to investor appetite — in challenging markets, loans may take longer to fill. Maximum loan sizes are typically lower than banks or funds.
Family offices and private credit
A growing segment of the market. Family offices and private credit vehicles lend on bespoke terms, often relationship-driven. Terms vary enormously — some are highly competitive for the right deal, others are expensive and slow. Access is typically through brokers or specialist networks rather than public platforms.
How to match your deal to the right lender type
- £5m+ GDV, experienced, conservative leverage → Clearing bank
- £1–10m GDV, some experience, up to 65% LTGDV → Challenger bank
- First-time developer, small scheme, need flexibility → Specialist fund or P2P
- Complex scheme, tight deadline, need creativity → Specialist fund
- Want to reach all relevant lenders efficiently → Use a platform like Assesr that matches by mandate
The most expensive mistake in development finance is not the interest rate — it is spending weeks on an application to a lender whose mandate does not fit your deal. A platform that matches on actual criteria (geography, asset class, loan size, leverage, borrower experience) prevents this entirely.