Development exit finance
Development Exit Finance Luton
Refinance away from your development facility on Luton and Bedfordshire schemes once practical completion is reached. Lower-cost short-term lending while units sell or let.
- Decisions in hours
- Completion in days
- £100k to £25m
- Bedfordshire specialists
Luton · Bedfordshire
Bridge to your next move.
About development exit
Short-term property finance across Luton and Bedfordshire.
Development exit finance is the bridge that takes over from a development facility once the scheme reaches practical completion. Development facilities are expensive while build is in progress because the lender carries construction risk. Once the building is finished and units are marketing or letting, that construction risk drops away and the facility becomes overpriced. Development exit refinances away to a cheaper monthly cost, gives the sales programme the breathing room it needs, and avoids the developer being pressured into accepting low offers because the dev facility is running out of time.
Development exit suits small and mid-sized developers with completed or near-complete schemes in Luton and across Bedfordshire. Typical schemes are 4 to 25 residential units, mixed-use blocks with retail at ground floor and flats above, or pure commercial conversions. The product fits developers whose dev facility term is running out, whose sales are not yet fully reserved, or whose existing lender will not extend on sensible terms. It does not suit schemes still under construction; that work belongs on a development facility. It also does not suit single-unit refurb projects, which sit under refurbishment bridging instead.
A typical case
How a development exit case runs in Luton.
A developer reaches practical completion on a 12-unit residential scheme on a brownfield site adjacent to the Power Court regeneration area in the Town Centre. Total gross development value £4.6 million. The development facility runs out in 4 months, with 5 units sold and 7 still on the market. The dev facility costs 1.4% per month on the outstanding balance, with the lender pressing for further sales or a refinance. We package a development exit facility against the 7 unsold units at 65% of their open market value, giving the developer 12 more months at 0.85% per month rather than 1.4%. Total facility £2.1 million. The lower monthly cost gives the developer time to hold out for asking-price offers rather than discount. Sales complete over the next 9 months, the bridge redeems in tranches as each unit completes, and the developer walks away with the full profit margin intact. The same pattern recurs on schemes around the Airport Area, the M1 corridor and the new build pockets near Leagrave station and along the A6.
Rates and fees
What this product costs.
Development exit prices between 0.75% and 1.0% per month for clean cases on residential or mixed-use schemes at practical completion. The product is materially cheaper than continuing on a development facility, which is the entire reason it exists. Cases at 60% to 65% loan to value against the gross development value, with the building certified at practical completion, sit at the lower end. Higher loan to value or schemes where some units are not fully finished sit higher. Arrangement fees run 1.5% to 2.0% of the loan. Valuation fees on multi-unit schemes typically £2,000 to £6,000. Legal fees both sides £3,000 to £8,000 depending on scheme complexity. No exit fee on most products. Partial redemption clauses allow each unit sale to redeem its proportionate share of the facility without penalty.
Loan size and term
LTV ceiling and how long you borrow for.
Development exit typically tops out at 70% of the gross development value or open market value of the unsold units, with most cases settling at 60% to 65%. Some lenders offer up to 75% on prime Luton schemes with strong sales momentum. Terms run 6 to 24 months, with most developers using 12 to 18 months to give the sales programme realistic time without overpaying.
Exit options
How the loan redeems.
Development exit has two main exit routes. First, sales of the individual units, with each completion redeeming the proportionate share of the facility. Most lenders allow per-unit partial redemption without penalty. Second, refinance of any unsold units onto a long-term BTL or commercial investment mortgage where the developer decides to retain stock. Many schemes combine both, with a portion of units sold and the remainder retained as a let portfolio. Lenders want a credible sales strategy at the offer stage, with realistic comparable evidence and an agent appointed.
What makes a deal work
The clean cases.
Development exit runs cleanly when the scheme is genuinely at practical completion, when there is a sales agent appointed and marketing live, when realistic comparables support the per-unit values, and when the developer has a credible track record. Schemes in mainstream Luton postcodes with active estate agent presence and recent comparable sales underwrite quickly. Schemes with even partial pre-sales already exchanged carry strong momentum. A developer with three prior completed schemes already in Bedfordshire underwrites quickly on the borrower side.
What doesn't
Where cases break.
Cases break where the scheme is not actually at practical completion (snagging still outstanding, building control sign-off not yet received), where the per-unit value assumptions are above local comparables, where the developer has no completed schemes in the area, or where the sales programme has been stalled for so long that the dev facility is already in distress. Cases also fail where the scheme has design or quality issues that affect saleability, regardless of how the developer values the units.
Our process
From first call to drawdown.
Step one, a triage call. Bring the scheme details, the practical completion certificate, the current sales status, the existing dev facility position, and the assumed per-unit values. Step two, we package the case and put it to three or four lenders with appetite for development exit on Luton and wider Bedfordshire schemes. Indicative terms back inside 48 hours for a multi-unit case. Step three, valuation instructed by a surveyor familiar with multi-unit schemes, legals running in parallel. Step four, full credit at the lender, typically 7 to 10 working days for development exit cases. Step five, drawdown, with funds clearing the existing dev facility. Standard timeline from triage to drawdown is 21 to 28 working days. We are not directly authorised by the Financial Conduct Authority; we work with FCA-authorised partners for regulated lending.
Talk to us
Tell us about the deal.
A quick triage call, then indicative lender terms inside 24 hours. We work Luton and across Bedfordshire.
FAQs
Frequently asked questions on development exit
What counts as practical completion for development exit?
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Practical completion typically means the building is structurally complete, fitted out, certified by building control, and ready for occupation, with any outstanding snagging items captured on a defects list rather than blocking handover. Some lenders accept slightly earlier, where the building is fitted out and substantially complete but final certification is days away. We agree the exact PC trigger with the lender at the offer stage so there is no ambiguity at drawdown.
Can development exit fund a stalled scheme in Bedfordshire?
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Sometimes. Where a scheme is genuinely at practical completion but has stalled on sales because the original dev facility is running out and the developer is forced to discount, development exit can stabilise the situation by refinancing onto a cheaper monthly cost. Where the scheme has stalled because of quality, design or planning issues, development exit is not the answer; those issues need solving first.
How are per-unit sales handled on a development exit facility?
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Most development exit facilities include a partial redemption clause that releases each unit on sale, with the proportionate share of the facility redeemed from the sale proceeds and the remaining units held at a recalculated loan to value. There is normally no penalty on partial redemption, though some lenders apply a minimum-interest period of 3 or 6 months. We negotiate the partial redemption mechanism case by case to match the expected sales velocity.
Next step
Talk to a Luton bridging specialist about development exit.
Indicative terms in 24 hours. We work development exit cases across Luton and the wider Bedfordshire market on a same-day enquiry response.