Property development often requires significant upfront funding long before any return is realised. Whether you are taking on your first development or adding another project to an existing portfolio, access to the right finance can make the difference between a stalled plan and a successful build. For many developers, a £350,000 loan provides the level of funding needed to purchase, refurbish or develop a property efficiently.
This article explains how a £350,000 property development loan works, why it may be needed, and what to consider before applying.
What is the payback on a £350k bridging loan?
| Borrowing £350: development bridge | Repayment notes |
|---|---|
| Purchase Price (Security Property) | £460,000 |
| Loan Requested | £350,000 |
| Term | 10 months |
| Net LTV | 76.1% |
| Interest Rate | 1.25% per month |
| Monthly Interest | £350,000 × 1.25% = £4,375 |
| Total Interest (10 months) | £4,375 × 10 = £43,750 |
| Lender Arrangement Fee (1%) | £350,000 × 1% = £3,500 |
| Loan Amount | £350,000 |
| Arrangement Fee | £3,500 |
| Total Interest | £43,750 |
| Total to Repay | £350,000 + £3,500 + £43,750 = £397,250 |
What is a £350,000 property development loan?
A £350,000 property development loan is a form of specialist finance designed to fund residential or mixed-use development projects. It can be used for ground-up builds, conversions, major refurbishments or property improvements intended for sale or refinance.
These loans are usually short to medium term, often ranging from 6 to 24 months. Interest is typically charged monthly and may be rolled up and paid at the end of the term. Most development loans are secured against the property being developed, and sometimes additional security is required.
Why would a developer need a £350,000 loan?
Property development is capital intensive, with costs incurred well before completion. A loan of this size can support several key stages of a project.
1. Purchasing a development property
Developers often need fast access to funds to secure a property at auction or complete a purchase quickly. A £350,000 loan can help cover acquisition costs when traditional mortgages are too slow or restrictive.
2. Funding build and refurbishment costs
Construction, materials, labour and professional fees can quickly add up. Development finance can release funds in stages, aligned with the progress of the build, ensuring cash is available when it is needed.
3. Bridging gaps in project funding
Even experienced developers can face cash flow gaps during a project. A development bridging loan can help cover these shortfalls without delaying works or putting strain on personal finances.
4. Supporting multiple units or larger projects
For small to medium-scale developments, £350,000 can be sufficient to fund conversions, extensions or the creation of multiple residential units, particularly outside major city centres.
What can a £350,000 development loan be used for?
A property development loan can usually be used for:
- Purchasing land or property for development
- Construction and refurbishment costs
- Professional fees, including architects, surveyors and planning consultants
- Labour and materials
- Contingency funding for unexpected costs
Lenders will expect a clear breakdown of how funds will be used, along with a detailed development plan.
How are property development loans structured?
Most development loans are structured differently from standard mortgages.
- Loan term: Typically 6 to 24 months
- Interest: Charged monthly, often rolled up and paid at the end
- Drawdowns: Funds released in stages as work progresses
- Security: Secured against the property, sometimes with additional assets
The loan is usually repaid through the sale of the completed development or by refinancing onto a longer-term mortgage.
What lenders look for
Before approving a £350,000 property development loan, lenders will assess:
- The viability of the project and exit strategy
- Planning permission status
- Development experience (or professional team in place)
- Gross development value (GDV)
- Build costs and contingency allowances
Having a well-prepared proposal and realistic financial projections can significantly improve approval chances.
Risks and considerations
Property development finance can be highly effective, but it is not without risk.
- Delays or cost overruns can impact profitability
- Market changes may affect sale values
- Interest and fees can be higher than standard mortgages
It is essential to build in contingency, work with reputable professionals and ensure the exit strategy is achievable.
Is a £350,000 development loan right for your project?
A £350,000 property development loan can provide the flexibility and funding needed to bring a project from concept to completion. When used correctly, it allows developers to move quickly, manage cash flow effectively and maximise returns.
However, this type of finance should always be approached with careful planning. Understanding the costs, risks and repayment strategy is key to a successful outcome. If your project is well-planned, financially viable and has a clear exit strategy, a £350,000 development loan could be the right solution to help turn your plans into reality.