Residential Development Finance

Residential development finance is designed for property developers, builders and investors focused on constructing new homes or renovating existing properties. It provides the necessary short-term capital for property developers to complete residential projects, helping them to create or improve living spaces, contributing to the housing market and growth of local communities.

The funds are typically released in stages, aligned with project milestones, ensuring steady progress and repayment usually occurs once the properties are sold or refinanced.

At Shawbrook, we recognise that developers need support with a range of projects, so we provide Development Finance for residential developments, while also supporting commercial projects and other development opportunities.

Residential development finance is designed for experienced property developers delivering multi-unit schemes, from small residential blocks to large-scale developments. It supports projects at all stages, including construction and redevelopment for those with a proven track record.

We fund a range of build types for experienced property developers, including:

• Apartments and multi-unit developments
• Housing schemes, from small sites to larger residential developments 
• Barn conversions and other change-of-use projects
• Co-living schemes
• Purpose-built student accommodation

Applying for Development Finance at Shawbrook is straightforward. Follow these steps:

1. Submit enquiry: Contact Shawbrook to discuss your project and funding needs. Indicative terms are provided at this stage.
2. Application form: Complete and submit the application form with the required details.
3. Documentation: Provide supporting documents such as project plans, financial appraisal and details of previous experience.
4. Assessment: Shawbrook will review your application (e.g. due diligence, including a site visit).
5. Offer: If approved, you'll receive a formal offer outlining terms and conditions.
6. Acceptance: Sign and return the offer to accept the financing terms.
7. Completion process: Formal valuation and monitoring surveyor reports and legal due diligence undertaken.
8. Drawdown: Access funds as your project progresses, paying interest only on the amount used – funds are paid out in arrears against evidenced work on site.

The loan term for residential development finance typically ranges from 12 months to a maximum of 36 months. This short-term financing is designed to cover the construction period, ensuring that funds are available as needed. Once the development is complete, the loan can often be refinanced into a standard mortgage with a longer term. This allows for greater flexibility and better alignment with the project's financial planning.

Yes, you may be able to refinance after your residential development project is completed. Shawbrook offers refinancing options that allow you to transition to a longer-term mortgage, potentially securing better rates and terms. This could help manage your cash flow and optimise your investment returns. Contact Shawbrook to explore refinancing solutions tailored to your needs.

Residential development finance is typically structured in stages. Initially, funds are provided to purchase the land, followed by phased drawdowns as construction milestones are met. This ensures the developer has access to capital when needed. Interest is usually charged only on the drawn amount, with repayment terms tailored to the project's duration.