The short version
| Refurbishment bridge | Development finance | |
|---|---|---|
| Best for | Existing building, works up to a full internal refit, conversion of an existing structure | Ground-up construction, major structural conversion, multi-unit schemes |
| Works as % of value | Up to about 50% of purchase price | Anything, including build cost exceeding land value |
| Loan basis | Up to 75% of purchase; total up to 70% of end value | Up to 65% to 70% of GDV; up to 90% of total cost |
| Drawdown | Purchase on day one; works in arrears in one to four stages | Land on day one; build in monthly stages against a monitoring surveyor |
| Rate | 0.75% to 1.1% pm | Roughly 0.8% to 1.2% pm equivalent, plus fees |
| Term | 6 to 18 months | 12 to 30 months |
| Speed to first drawdown | 2 to 4 weeks | 6 to 10 weeks |
| Monitoring | Light, sometimes none | Full: monitoring surveyor, cost reports, warranties |
Use a refurbishment bridge when
- The building exists and will still be recognisably the same building at the end.
- Works are a modest fraction of the value and can be done in months.
- You need to complete fast, at auction or ahead of a competing buyer.
- The exit is a BTL refinance or a single sale.
Use development finance when
- You are building from the ground up or doing a structural conversion into multiple units.
- Build costs are large relative to the land or purchase price.
- The project runs beyond 18 months.
- You need the lender to fund most of the build cost, not just the purchase.
The combination
Many developers use both. A land bridge secures the site fast, development finance refinances it and funds the build, and a development exit bridge replaces the development facility at practical completion while the units sell. Each is the cheapest tool for its stage.
Common mistake
Trying to run a development on a bridge because it is quicker to arrange. Bridging lenders cap the works facility and do not want to be funding structural work over 18 months; when the money runs out mid-build, the options are poor. If it is a development, fund it as one.
About the numbers on this page. Rates, fees and loan-to-values are typical market ranges for unregulated bridging in England, given so you can size a deal. They are not an offer. Your terms depend on the property, the exit, the lender and you.
Questions we get asked
Can I convert a house into flats on a bridge?
Often, yes, if the structure stays and the works are within the bridging lender's limits. Conversions into more than four or five units, or with significant structural work, usually need development finance.
Is development finance more expensive than bridging?
The headline rates are similar. Development finance carries more fees (monitoring surveyor, exit fees, higher arrangement fees) but funds much more of the cost, so the equity you need is lower. Compare total cost against total equity, not rate against rate.
Tell us the deal.
A few numbers and a postcode is enough for a first view. Indicative terms cost nothing and commit you to nothing.