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Why use development finance?


For anyone who doesn’t know, development finance is when a lender gives finance for a building development. The definition of ‘development’ will vary from customer to customer and can include small projects for personal residential purposes or new builds for property developers. Knowing exactly why you might want to use development finance and what it can be used for can be confusing. This blog will help clear things up for anyone considering development, be it big or small.

Looking for the latest development finance rates? Take a look at the best development finance rates out there with our comparison tool.


Starting off with smaller developments, these are often popular with those hoping to renovate their home with general upgrading or decoration. They would not usually include any structural work in the development.

This type of development finance is referred to as light refurbishment. It’s a great option for anyone hoping to increase the value of a property or just to simply have a nicer home to live in. We wrote a piece about adding value to your home if you were looking for some guidance, in fact! For your best chance of getting a light refurbishment loan, be sure to check that your property qualifies as suitable security for a mortgage.



There are a few more finance options available for heavier development projects than there are for small ones. Develop-to-let finance is ideal for an existing or would-be landlord. For this loan, the intention is to refurbish an existing property and retain it when the works have been completed. With the property now up to renting standards, the owner can find tenants to fill it.

You can also get a much larger loan for more significant, structural refurbishments. Should a building need heavy work, such as an extension, you can use development finance to fund it. This is often used by developers as a way to drastically increase the value of a property before they sell it. We wrote some tips for residential redevelopments should you feel like reading a guide to flipping houses.



Finally, there are the more substantial development finance options, usually reserved for those looking for investment opportunities (although not always). Conversions are examples of potentially large developments. Finance for conversations is used for houses that are currently single units but want to be converted into flats, or the other way around. It doesn’t have to be houses, either. The property could be commercial, with offices that a borrower wants to turn into residential flats. Converting a large, single unit house into flats is a popular choice for property developers, and converting a building of flats into a single property could be a great way for a buyer to develop their ideal home with more space.

One of the larger development finance options is to get a mortgage for a new build. A new build could range from a small housing development right up to tower blocks. These are large investments and getting the right funding for the project could mean a difference of tens of thousands of pounds in savings. It’s important to find a broker when dealing with larger developments to ensure the best finance option for your project.


Development finance can be a great way to add value to a property, or for a larger investment opportunity. To make life easier for yourself, it’s wise to get planning consent before you try to get a loan approved because it can be much more difficult to get funding without it. To find out what Coreco can offer you, take a look at our Specialist Mortgages section on this website, on the Development Finance page.


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Andrew Montlake

Written by Andrew Montlake

Andrew Montlake, better known as Monty, began his journey with an Hons degree in Economics & Politics before starting in the mortgage industry in February 1994. As a main founder of Coreco in 2009, he successfully grew the brand, marketing, and communications, and was made MD in 2019 focussing on the overall vision, strategy, and culture of the company. As Coreco’s media spokesperson, Andrew can often be seen or heard on TV and radio as well as regularly commenting in the national, local, and trade press. He is the author of this acclaimed Mortgage Blog and is well-known for his social media, podcasts, and public speaking. Andrew is now proud to serve as Chairman of the Association of Mortgage Intermediaries, (AMI) as a cheerleader for the Mortgage Industry as a whole and continues to work at the coal face, writing mortgage business and advising clients.

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