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Bridging finance is short-term property-secured lending, typically arranged over 1 to 24 months, designed for situations where a standard mortgage is too slow, unavailable, or inappropriate for the property or transaction type. The UK bridging market has grown substantially in recent years and stood at approximately £13.4 billion in outstanding balances in 2025.
Lenders assess the prospective value of the land based on the development potential it carries, whether from existing planning consent or from a realistic assessment of what planning is likely to be achievable.
Land finance is also used by developers who already own land and need to fund a planning application without having to sell or develop the site immediately. In these cases, the existing land is used as security for a short-term facility that covers planning costs, professional fees, and holding costs while the planning application is progressed. The loan is repaid when planning consent is granted and the site is sold with the benefit of planning, or when a development finance facility is arranged to fund the build.
Land finance is available for a wide range of land types, but lender appetite varies significantly by planning status and land category. Brownfield land with planning permission is the most straightforward to finance. Agricultural land with potential for residential development is more speculative and requires lenders comfortable with planning risk. Green belt land is the most difficult to finance because planning consent is hardest to achieve and lenders cannot rely on planning
permission being granted within the facility term.
A site with full planning permission is the most fundable type of land asset. The value is established by the planning consent and the permitted use, and lenders can underwrite the loan against a realistic residual land value calculation. Most land finance lenders advance 60 to 70 percent of the open market value of land with full planning permission. The facility is typically drawn at purchase and repaid when the development finance facility is arranged to fund the build.
Outline planning permission establishes the principle of development but leaves some details (typically design, access, and landscaping) to be agreed at reserved matters stage before building can commence. Lenders treat outline permission as a weaker planning position than full permission and typically advance 55 to 65 percent of the outline consent land value.
Speculative land without planning permission is the most challenging land type to finance. Lenders who operate in this space assess the planning potential of the site, the local authority’s recent planning record for similar sites, and the developer’s relationship with the local planning authority. Advance rates are typically 50 to 65 percent of the existing use value or the speculative planning hope value, depending on how credibly the planning case is presented.
| Land Type | Typical LTV | Typical Rate (pm) | Typical Term | Exit Route |
|---|---|---|---|---|
| Land with full PP | 60% – 70% | 0.75% – 1.00% | 12 – 24 months | Dev finance or sale |
| Land with outline PP | 55% – 65% | 0.85% – 1.10% | 12 – 24 months | Reserved matters + dev finance |
| Land without PP (good planning case) | 50% – 60% | 1.00% – 1.30% | 12 – 24 months | Sale with PP or dev finance |
| Agricultural land (resi potential) | 50% – 55% | 1.10% – 1.40% | 12 – 18 months | Sale with PP |
Land finance is assessed on the security value of the land and the credibility of the exit strategy.Unlike development finance, there is no build to add value — the exit depends on either achieving planning permission and selling, or proceeding to build.
The residual land value calculation works backwards from the anticipated GDV of the completed scheme, deducting total development costs including build, fees, finance, developer profit, and a risk margin. The resulting figure is what a developer should rationally pay for the land. Lenders use this calculation to sense-check the land price and to assess whether the exit route via development is genuinely viable
For land without planning permission, the lender's primary concern is whether planning is achievable within the facility term. A planning consultant's report supporting the planning case, evidence of the local authority's planning policy and recent decisions on similar sites, and the developer's experience in obtaining planning permission in similar contexts all strengthen the application.
We review the site, the planning position, and the proposed exit strategy. For land without planning permission, we also review the planning case and advise on whether the proposed planning route is consistent with what lenders in this space require
Land finance lenders are a specialist sub-set of the bridging and development finance market. We identify the most appropriate lenders for the specific planning status, land type, and loan size, and approach them with a structured information pack.
The lender instructs an independent RICS valuer who specialises in development land. The valuation assesses both the current open market value and, where relevant, the planning potential value. For land without planning permission, the valuer also provides a view on the site's planning prospects.
Credit decisions for land finance typically take one to two weeks for straightforward sites with planning permission, and two to four weeks for more complex speculative land applications. Legal completion follows the credit decision
During the facility term, the developer progresses the planning application. We monitor the planning timetable and advise on facility extensions or refinancing options if the planning process takes longer than anticipated. On consent being granted, we arrange the development finance facility to fund the build or assist with a sale to a housebuilder.
Land acquisitions and planning processes have their own specific challenges. Here are some of the situations our advisers help land buyers and developers work through.
Land with planning permission acquired at auction requires the same rapid completion as any other auction purchase. We arrange land finance before the auction so you know your borrowing capacity and can bid with confidence. Completion within the standard 28-day auction period is achievable for sites with clean planning consent and a straightforward security position.
Agricultural land with development potential is a long-term play, and the planning process can take several years. If you need to release capital from the land before planning is achieved, the options are narrower and the LTV lower than for land with existing planning consent. We identify lenders who are comfortable with speculative agricultural land and who understand the relevant local planning context.
Planning delays are common, and land finance lenders expect extensions to be requested on some cases. We engage with the lender as soon as a planning delay becomes apparent and negotiate the extension before the facility expires. Where the existing lender cannot accommodate an extension on reasonable terms, we identify alternative lenders who can refinance the land facility for the additional time needed.
Landowners can raise capital against existing land to fund planning costs, professional fees, and holding costs while a planning application is progressed. The facility is secured against the land and repaid when planning is achieved and the site is sold or when development finance is arranged to fund the build. The land does not need to be unencumbered to qualify, though existing charges affect the available LTV.
Speak to an adviser to discuss your circumstances and find out how we can help.
Clear,honest answers to the questions we hear most from clients and introducers.
Yes, though the lender panel is narrower and the LTV lower. Lenders in this space assess the planning potential of the site, the strength of the planning case, and the developer’s experience in navigating planning applications. A strong planning consultant’s report supporting the planning case is an important part of the application for land without existing planning consent.
Land finance is a form of bridging loan secured against land rather than a building. Standard bridging lenders typically require a building as security. Land finance lenders specialise in land as a security type and understand how to assess planning potential and residual land value. Some lenders offer both products; others are land-specialist only.
Yes. The facility is typically structured to cover both the land acquisition and an agreed budget for planning costs, professional fees, and holding costs. The planning cost element may be held in a reserve account and released as planning costs are incurred, rather than advanced in full at the outset.
Most land finance lenders advance up to 65 to 70 percent of the open market value of land with full planning permission. Some specialist lenders go to 75 percent for very strong planning consents in high-demand locations. Mezzanine finance can increase effective leverage in some cases, though the blended rate increases.
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