London Development Finance Services

Stretch senior finance bridges the gap between conventional senior debt and the additional leverage that many London developers require. Operating at 65% to 75% loan-to-value within a single facility agreement, stretch senior eliminates the complexity and cost of managing separate senior and mezzanine facilities. This single-lender structure simplifies the legal process, reduces arrangement fees, and provides a single point of contact throughout the development lifecycle.

Rates for stretch senior facilities in London typically start from 8% per annum, reflecting the higher leverage and increased risk accepted by the lender. The additional cost compared to conventional senior debt is usually more than offset by the reduced equity requirement and the elimination of mezzanine arrangement fees, legal costs, and intercreditor complexity. For developers looking to optimise their capital efficiency across multiple schemes, stretch senior is often the most attractive option on a net cost-of-capital basis.

Stretch senior finance is particularly effective for London developments where the scheme has strong fundamentals but the developer wants to deploy their equity across multiple projects simultaneously. We see strong demand for this product in growth boroughs such as Greenwich, Lewisham, and Ealing, where developers are pursuing multiple schemes concurrently to capitalise on regeneration momentum. The product is also well-suited to developers who have a strong track record but want to minimise their equity exposure on individual transactions.

We work with a select group of lenders who specialise in stretch senior facilities and understand the London market dynamics that underpin higher-leverage lending. The credit assessment process is broadly similar to conventional senior lending, with additional emphasis on the developer's track record and the strength of the exit strategy. Learn more about how the process works.

Joint venture equity partnerships represent the ultimate high-leverage development funding solution, providing 90% to 100% of total development costs in exchange for a share of the project profits. Unlike debt facilities, JV equity structures position the capital provider as a co-investor rather than a lender. This alignment of interest can be transformative for developers who have the skills, experience, and pipeline but lack the capital to fund their equity contribution.

In a typical JV structure, the equity partner funds the developer's equity share (the portion not covered by senior debt) and may also provide the senior debt layer or arrange it separately. The developer contributes their expertise: sourcing the site, securing planning permission, managing the build, and overseeing sales. Profits are shared according to a pre-agreed split, which typically ranges from 50/50 to 70/30 in favour of the developer, depending on the level of capital contributed by each party and the developer's track record.

JV equity is particularly powerful in the London market, where land values and build costs create significant capital requirements. A developer pursuing a scheme in Wandsworth or Islington might require £2 million to £5 million in equity alone — capital that could be deployed more efficiently across multiple smaller projects if a JV partner funds the equity layer. For first-time and second-time developers, JV equity also provides a route into the London market that would otherwise be inaccessible.

We work with a curated group of JV equity providers including family offices, property investment companies, and private equity funds with dedicated London development allocations. The selection process is rigorous: equity partners assess not only the scheme but also the developer's experience, financial standing, and project management capability. We help developers prepare comprehensive presentations that address every aspect of the JV assessment process.

Permitted development (PD) rights allow certain types of building conversion — most commonly office-to-residential under Class MA (formerly Class O) — to proceed without requiring full planning permission. This route has become one of the most significant sources of new housing delivery in London, particularly in outer boroughs with concentrations of underutilised commercial space. Our specialist PD finance, available from 7% per annum, is specifically structured to fund these conversion projects.

Permitted development conversions carry unique characteristics that distinguish them from conventional ground-up schemes. The build costs tend to be lower per square foot (as the structural shell exists), the development timeline is typically shorter (8 to 14 months), and the planning risk is substantially reduced (prior approval addresses only transport, contamination, flooding, and noise rather than the principle of development). However, PD schemes also carry specific risks: the existing building condition may reveal unforeseen costs, the unit mix is constrained by the existing floor plate, and minimum space standards must be achieved.

In London, permitted development has been particularly active in boroughs such as Croydon, Hounslow, Harrow, and Hillingdon, where surplus commercial stock provides opportunities for conversion. We also arrange finance for PD conversions in inner London boroughs where Class MA rights apply. The key to successful PD lending is demonstrating that the existing building is suitable for conversion, that the cost plan is realistic, and that the resulting units will meet or exceed minimum space and amenity standards.

We have built relationships with lenders who have specific appetite for PD schemes and who understand the nuances of conversion projects. These lenders assess PD proposals differently from ground-up schemes, focusing on the condition survey, asbestos reports, structural assessments, and the conversion specification rather than greenfield development metrics. Our expertise in presenting PD schemes to the right lenders consistently delivers faster approvals and more competitive terms. Read our case studies for examples of PD schemes we have funded.