The Myth: Development Finance is Only for Big Professional Developers
Development finance is commonly associated with large commercial schemes, but the same products are available for first-time developers converting a single property or adding an extension.
The term 'development finance' conjures images of crane-filled construction sites and large housebuilding firms. In reality, the same specialist lenders who fund major schemes also actively lend on much smaller projects accessible to individual investors.
A private individual purchasing a rundown semi-detached house in need of a full structural refurbishment can access development finance to fund both the acquisition (based on the current value) and 100% of the build costs. The loan is drawn down in stages, certified by a Quantity Surveyor, meaning you only pay interest on funds actually drawn.
First-time developers are accommodated by many lenders, albeit with slightly more conservative LTVs (55–60% of GDV vs 65% for experienced developers). Many specialist brokers, including Phantom Finance, can structure these deals specifically to allow new developers to complete their first project and build the track record needed to unlock better terms on their second.