Bridging Finance for Land & Plots
Short-Term Finance to Secure Land or Planning Permission
Bridging finance provides short-term funding to secure land or plots quickly, often used when traditional mortgages aren't available or when speed is essential. Bridging loans are typically used as a stepping stone to longer-term finance or to complete a purchase before selling an existing property.
When to Use Bridging Finance
- Securing land quickly: When you need to move fast to secure a plot before others
- Obtaining planning permission: Buying land to apply for planning, then refinancing once consent is granted
- Chain breaks: Completing a purchase while waiting for your property sale to complete
- Auction purchases: Quick completion required for auction purchases
- Development projects: Securing land before arranging development finance
Typical Terms and LTV
- Loan-to-value: Typically 50-70% for land without planning, up to 75% with planning
- Loan term: Usually 6-18 months, sometimes up to 24 months
- Interest rates: Higher than mortgages, typically 0.5-1.5% per month
- Arrangement fees: Usually 1-2% of loan amount
- Exit fees: May apply if loan runs beyond agreed term
Exit Strategies
Bridging lenders require clear exit strategies:
- Refinance to term mortgage: Once planning permission is obtained or property is completed
- Sale of property: Selling the land or completed development
- Sale of other assets: Using proceeds from sale of another property
- Cash repayment: Using available funds to repay the loan
Development Bridging Based on GDV
For development projects, bridging may be based on Gross Development Value:
- Lending calculated on final value of completed project, not purchase price
- Higher leverage possible (60-75% of GDV)
- Staged drawdowns as build progresses
- Exit via sale of completed units or refinance
Important Considerations
- Speed vs cost: Bridging is fast but more expensive than traditional mortgages
- Exit planning: Essential to have a clear exit strategy before taking bridging finance
- Cashflow: Ensure you can cover interest payments and fees
- Professional advice: Always seek advice from a specialist broker
Land Finance Calculator
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Estimated Borrowing Capacity
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Important: This calculator provides indicative estimates only. Actual borrowing capacity depends on your personal circumstances, credit history, and lender criteria.
Landlister introduces users to independent FCA-regulated brokers who can help with land, plot, rural and development finance. Landlister does not provide financial advice.
Important: Landlister introduces users to independent FCA-regulated brokers who can help with land, plot, rural and development finance. Landlister does not provide financial advice.