The cost of a phone call and a PDF
Development finance broker fees are one of the largest costs in arranging property development funding — yet they're rarely discussed transparently. Most developers accept the 1–2% fee as "just what it costs" without examining what they're actually paying for.
Let's do the maths. On a typical £3M development finance deal at a 1.5% broker fee, you're paying £45,000. That's a significant chunk of your profit margin — often more than the lender's arrangement fee itself.
What does the broker fee actually cover?
A traditional development finance broker's fee covers three main activities:
- Credit paper writing (40–50% of the work): The broker analyses your documents, writes up the deal in a format lenders can assess, and includes financial analysis, comparable evidence, and a recommended structure.
- Lender sourcing (20–30% of the work): The broker contacts lenders in their network, presents the deal, and manages initial conversations to gauge interest and terms.
- Process management (20–30% of the work): The broker manages the deal through valuation, legal, and drawdown stages, liaising between borrower, lender, solicitors, and monitoring surveyor.
The first two activities — credit paper writing and lender sourcing — are precisely the tasks that AI now handles better, faster, and cheaper. The third — process management — is increasingly streamlined by platform technology.
The real numbers
Here's what broker fees look like across typical development finance deal sizes:
- £500K deal at 2%: £10,000 broker fee
- £1M deal at 1.5%: £15,000 broker fee
- £3M deal at 1.5%: £45,000 broker fee
- £5M deal at 1%: £50,000 broker fee
- £10M deal at 1%: £100,000 broker fee
At Assesr's 0.5% drawdown fee, the same deals cost £2,500, £5,000, £15,000, £25,000, and £50,000 respectively. The saving ranges from £7,500 on a small deal to £50,000 on a larger one.
Hidden costs brokers don't always mention
Beyond the headline fee, there are several costs that developers often discover mid-process:
- Abortive fees: Some brokers charge a fee if the deal doesn't proceed — even if the failure was due to lender appetite or market conditions rather than anything the borrower did.
- Minimum fees: Many brokers have minimum fee levels (often £5,000–£10,000) that disproportionately affect smaller deals.
- Time cost: The 6–12 week timeline for a traditional broker process has a real cost in terms of delayed project starts, holding costs on land, and missed market windows.
- Opportunity cost: A broker's limited lender network (typically 10–30 relationships) means you may not see the most competitive offer available in the market.
The 0.5% alternative
AI platforms like Assesr charge 0.5% on drawdown — and that includes everything: credit paper generation, lender matching, submission management, and process support. There's no upfront cost, no subscription, and no fee if the deal doesn't complete.
The credit paper is generated in 60 seconds from uploaded documents. The deal is matched to 50+ specialist lenders. Lenders respond in an average of 4.2 hours. The entire process takes hours instead of months.
For the developer, the calculation is simple: pay £45,000 for a broker pack that takes 4 weeks, or pay £15,000 for an AI credit paper that takes 60 seconds. Same lender access. Same quality analysis. A quarter of the cost.
When paying a broker fee makes sense
To be balanced: there are situations where a broker's fee is justified. If your deal is genuinely complex — unusual planning, multiple tranches, cross-collateralisation, borrowers with complicated structures — the strategic advice of an experienced broker can be worth the premium. The question is whether that applies to your deal, or whether you're paying a 2026 broker fee for what is now a 60-second AI task.