The UK property market has long been seen as a safe haven for investors looking to generate significant profits. In terms of the options available, there are many ways the buoyancy of the UK housing market can be leveraged to make money.

Some of the most popular examples of which include the following:

Flipping Properties: The classic method of buying low and selling high, where investors purchase homes in a poor state of repair, conduct the necessary renovations, and sell them on at much higher prices.

Capital Gains: A somewhat longer-term strategy, where homes are purchased on the basis of their future potential, and sold several years (or perhaps decades) down the line when their market value has increased significantly.

Property Conversions: Converting commercial or industrial properties of any kind into habitable homes can be a hugely profitable venture. Particularly in an era where ‘industrial chic’ is so relentlessly desirable.

Ground Up Development: There is also the option of building new properties from the ground-up, and selling them on for significantly more than the total development costs.

What each of these project types has in common is the way in which they are almost always funded externally. Investors (aspiring or established) rarely use their own on-hand capital to fund ventures like these.

Instead, they turn to specialist lenders for the financial support they need, while keeping their own capital as liquid as possible. Experienced developers are often able to conduct multiple projects at the same time, for the simple reason they are not using their own money.

But what are the different types of funding available for property developers? If you are looking to cover as much of the project’s total costs as possible with third-party funding, what products should you consider applying for?

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Refurbishment Finance

First up, refurbishment finance is a specialist facility issued for the purchase and refurbishment of a property. Typical loan values range from £100,000 to £10 million, usually issued with a maximum LTV of around 70%.

This can be a particularly useful facility for picking up properties at auction, which often sell for significantly less than their true market value. It can also be ideal for purchasing properties in a poor state of repair, which may be considered ‘unmortgageable’ and exempt from more conventional loans.

Most refurbishment finance loans are strictly short-term in nature, repayable within 6 to 18 months after the loan is issued.

Development Finance

Development finance (residential or commercial) is usually issued to cover the costs of more extensive property development projects or new builds. Loan values range from £500,000 to more than £10 million, and can be taken out with LTV of up to 85% (sometimes higher).

A short-term facility with terms of around six to 24 months, development finance can be hugely cost-effective when repaid promptly. Interest can be as low as 0.5% per month, with minimal additional fees and charges.

With development finance, the funds issued to cover the costs of the projects are released in a series of stages. These instalments are tied to the completion of important project phases, overseen by a surveyor allocated by the lender.

The caveat with development finance is how it is typically reserved exclusively for experienced property developers and construction companies. It is rarely accessible for first-time developers, or for those who lack a provable track record in the field.

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Bridging Loans

Bridging finance is one of the most flexible and accessible options for new and established property developers. A bridging loan is issued almost entirely on the basis of two things – qualifying assets (security) to cover the costs of the loan, and a provable exit strategy (how you intend to repay the loan).

This makes bridging finance ideal for established and aspiring property developers from all backgrounds. No experience in property developments, poor credit, a history of bankruptcy, no proof of income – none of these things will necessarily count you out of the running.

Best of all, bridging finance can be arranged in a matter of days and can be secured against almost any type of property (or land). It can be the perfect facility for picking up unmortgageable properties at low prices and can be hugely affordable when repaid promptly (interest starting from less than 0.5% per month).

Commercial Mortgages

A commercial mortgage provides developers with the freedom to repay their debt over a much longer period – typically 15 years or more.

It is a less cost-effective facility overall, given the interest that continues to accumulate for the life of the loan. However, it can provide investors with much greater spending power in the interim by keeping monthly repayments to the bare minimum.

Like development finance, commercial mortgages are typically issued only to those with an appropriate background in property developments. You can also expect your lender to examine the specifics of your project, your financial projections and your accounts before making you an offer.


Bridge-to-let can be a fantastic facility for those looking to purchase, renovate and ultimately let out properties to generate ongoing revenues. Bridge-to-let is a specialist type of loan that combines a short-term bridging loan with a longer-term BTL mortgage.

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A fast-access bridging loan is issued to enable the borrower to purchase a property, with no restrictions on how the funds are used. Low-cost properties in need of renovations can be purchased at auctions, or directly from sellers elsewhere. The costs of the subsequent renovations are covered by the initial bridging loan and the completed property is let out to tenants.

At which point (usually six to 12 months after the property was purchased), the bridging loan is repaid with a longer-term buy-to-let mortgage. This enables the borrower to repay the outstanding balance gradually while generating profits through monthly rent yields. By arranging both products with the same lender, arrangement fees and all other borrowing costs can be kept to the bare minimum.

For more information on any of the above or to discuss your requirements in more detail, contact a member of the team at UK Property Finance today.

Craig Upton supports UK businesses by increasing sales growth using various revenue streams online. Creating strategic partnerships and keen focus to detail, Craig equips websites with the right tools to increase traffic. Craig is also the CEO of iCONQUER, a UK based SEO Firm and has been working in the digital marketing arena for over a decade. A trusted SEO consultant and trainer, Craig has worked with British brands such as, DJKit, UK Property Finance, Serimax and also supported UK doctors, solicitors, builders, jewellers, to mention a few, gain more exposure online. Craig has gained a wealth of knowledge within the digital marketing space and is committed to creating new opportunities working with UK companies.