Development

“My scheme is finished but the units are not selling and the loan is due”

Development exit finance replaces a development loan once the scheme is built, usually at a lower rate and a higher loan to value. It removes the deadline pressure on sales and can release capital before the final unit completes.

An illustrative situation, not a client case study. It describes the kind of enquiry this market sees. Any figures are examples, not a quotation, and no credit check or lender decision is involved in reading this.

Sound familiar?

Building control has signed the scheme off, or is about to
Some units have sold and others have been on the market for months
Your lender has offered an extension, at a fee and a higher rate
You have another site you want to move on

The situation

A development facility is priced for construction risk. Once the building is finished, that risk has gone, but the pricing usually has not — and the term was set against a build programme, not against how long a slower market takes to absorb units.

Developers in this position often discount to force a sale, which can take a serious bite out of the scheme’s profit. Refinancing is frequently the cheaper answer.

Why the usual lenders say no

A term lender will not fund unsold new-build stock held for sale.
Buy-to-let lending only helps for units you intend to retain and let, not for those being sold.
Extending the existing facility is a lender decision, not a right, and usually carries a fee.

What usually works

Development exit finance

Priced closer to standard bridging than to development lending, because the lender is secured against finished, saleable units rather than a building site.

Individual unit release prices

Negotiated so that each sale redeems part of the facility and releases that unit from the charge, rather than requiring a full redemption.

Releasing capital for the next site

Because development exit usually runs at a higher loan to value than the facility it replaces, the refinance can free up the deposit on your next project.

A term that lets the agent work

Marketing units properly against a twelve-month horizon tends to achieve more than selling against a deadline six weeks away.

Roughly how the numbers look

Illustrative figures for this situation
Example gross development value	£1,240,000
Typical exit facility	Around 55% to 65% of value
Rate versus development finance	Usually materially lower
Term	Commonly 12 months
Unit releases	Agreed price per unit, redeemed on each sale

Agree realistic release prices at the outset. Setting them too high stalls individual sales later. These are examples to show the shape of a deal, not a quotation. Work out your own figures in the bridging calculator.

What we would need from you

Building control completion certificate and any warranties
A redemption statement from the existing development lender
Sales evidence: units sold, under offer, and the agent’s current appraisals
The scheme’s final cost position against the original appraisal
Details of any units you intend to retain
Company accounts and your development CV

Things that catch people out

Act before the facility reaches term. Default interest on development lending is expensive.
If units have sat unsold for months at the current price, the price is part of the problem.
Where you plan to retain units, arrange the buy-to-let refinance in parallel so both complete together.

Questions we get asked

When can I arrange development exit finance?

Usually at practical completion, once building control has signed the scheme off. Some lenders will consider a scheme very close to completion, but the closer to finished, the better the terms.

Is it actually cheaper than extending?

Usually, yes — and it buys a longer runway. An extension fee plus an increased rate for three months frequently costs more than refinancing for twelve.

Can I release profit before all the units sell?

Often. Because the exit facility typically runs at a higher loan to value than the development loan it replaces, the difference can release capital, which is frequently the deposit for the next site.

The product that usually fits

Development finance

Every case is different. A specialist will confirm what actually fits yours.

Rather talk now?

020 4525 4876

9:00am – 5:30pm, Monday to Friday

Keep reading

Related situations and guides

“My bridging loan is about to expire and the property has not sold”

The term is nearly up, the sale has not happened, and default pricing is approaching.

Read the scenario

“This is my first development and lenders keep asking about my track record”

You have the site and the planning, but no completed schemes to point at.

Read the scenario

Bridging vs development finance: which do you need?

The real dividing line between a bridge and a development facility, how each is drawn down and priced, and which one your scheme needs.

Read the guide

Bridging loan exit strategies explained

Sale, refinance or something else: how lenders underwrite your exit, what evidence they want, and what happens if the exit slips.