Property development finance in Scotland
Fundamenta arranges property development finance for projects across Scotland, from a single new-build house to multi-unit schemes and commercial conversions. We spent years working for lenders before we started broking, so we know how a credit team reads a development appraisal. Every application we put forward is built with that in mind.
What we can fund
Most of the development enquiries we see fall into one of these:
- Ground-up new builds, from one plot to larger residential schemes
- Conversions, including offices, shops and churches turned into flats or houses
- Heavy refurbishment of properties that can't currently be mortgaged
- Mixed-use schemes with residential and commercial space
- Land purchases, with or without planning permission
- Development exit finance once the build is finished and units are being sold
If you're buying a site before the development loan is in place, that part is usually done with a short-term bridging finance loan and refinanced when the build starts.
Why funding a Scottish project is different
A lot of UK development lenders don't lend in Scotland at all. Some that do only take on a small number of Scottish schemes each year. The legal and planning systems are different, and a lender who isn't used to them tends to slow down or add extra conditions.
These are the differences that come up most often:
- The lender's security is a standard security registered with the Registers of Scotland, not an English legal charge.
- Lenders want the building warrant in place before the first drawdown, and completion certificates before they release the final funds or agree a refinance.
- A Section 75 agreement attached to the planning consent can add costs, and those need to be in the appraisal from the start.
- Missives work differently from exchange of contracts in England, which affects the timing of land purchases.
None of this causes problems if the lender and the solicitors know the Scottish system. We know which lenders are active north of the border and what each of them expects to see.
How we work on a development case
Before anything goes to a lender, we go through your appraisal with you. We compare build costs with similar schemes, check the gross development value against local sales evidence and ask the questions a credit committee would ask. If there's a weak spot, it's much better that we find it than the lender does.
Then we approach lenders whose appetite matches your scheme. A lender that's comfortable with a 20-unit scheme in the central belt may not look at two houses in Argyll, and the reverse is also true. Getting the right lender first time can save weeks.
The exit gets the same attention. If you're selling, we look at how long sales actually take in that area. If you're refinancing onto a term loan, we check the numbers work before you commit. We'll also talk through what happens if prices or timescales move against you, because lenders will ask.
If you'd like to understand the different types of funding first, read our guide to development finance.
What happens after you get in touch
- We have a call about the project: the site, costs, timescales and your experience.
- We review your appraisal and documents and tell you honestly how lenders are likely to see it.
- We approach suitable lenders and come back to you with indicative terms.
- Once you've chosen a lender, we manage the valuation, the legal work and credit approval.
- During the build, funds are released in stages after the monitoring surveyor signs off each phase. We stay involved until the loan is repaid.
Common questions
It depends on the scheme, the lender and your track record. Development lenders usually look at two figures: the loan as a percentage of total costs, and the loan as a percentage of the gross development value. We'll show you what's realistic once we've seen your numbers.
Yes, although you'll usually need a strong professional team around you, and lenders may lend a little less than they would to an experienced developer. Starting with a smaller scheme often helps.
All of Scotland, including the islands and areas such as the Highlands and the Borders. We also arrange development finance for projects in England and Wales.
Indicative terms can come back quickly if the information is ready. Full approval and the first drawdown usually take several weeks, mainly because of the valuation and legal work. We'll give you a realistic timeline at the start.
Not always. Land can be bought without planning using short-term finance, although lenders will lend less against it. The development loan for the build itself needs full planning and, in Scotland, a building warrant before funds are released.
Talk to us about your project
Send us the basics of your scheme and we'll come back to you with an honest view of how lenders are likely to see it.