Development finance for first-time developers

Yes, some lenders fund first-time developers, but the choice is narrower and terms are usually more cautious. Lenders want confidence that the scheme will be built on time and on budget, so they look for relevant experience in property, construction or refurbishment, a strong professional team and a realistic plan with a clear margin for the unexpected.

A first project is often a smaller scheme, such as a single house, a conversion or a few flats. How development finance works in general, including staged drawdowns, is explained in the guide what is development finance.

Lenders assess the people behind a scheme as well as the property. For a first-time developer, an experienced architect, project manager, quantity surveyor and main contractor on a fixed-price contract can reassure a lender. Their track records, insurance and warranties are checked during underwriting, and the monitoring surveyor reviews the cost plan before any funds are released.

Relevant background, such as refurbishing several properties or working in construction, also counts. Lenders differ in how much weight they give it, so a clear summary of experience helps.

First-time developers are usually offered a lower share of costs and of gross development value than experienced developers, so more of their own money is needed. Pricing may be higher, and lenders may ask for personal guarantees and a larger contingency. Terms improve once a first scheme has been completed successfully and sold, because a track record lowers risk.

Pricing structures and fees are explained on the development finance rates page.

A joint venture with an experienced developer or a funding partner is a common route for a first project. The partner brings experience or capital, or both, and the first-time developer brings the site, the planning gain or the work. Profit is shared under an agreed structure, which can help secure senior finance on better terms.

Joint venture and mezzanine options are explained in more detail on the page about joint venture and mezzanine development finance.

A strong application from a first-time developer includes the planning permission, a detailed cost plan with contingency, sales evidence for the finished units, details of the professional team and contractor, a programme of works and a clear exit. Showing the profit margin after all costs, including finance, helps the lender judge whether the scheme can absorb delays.

Specialist development finance brokers can identify lenders that consider first-time developers for a particular scheme type.