Conversion Development Finance
Specialist funding for the conversion of buildings into residential and mixed-use schemes; from offices to barns, in both urban and rural locations.
Commercial to residential projects
Heritage and listed building conversions
Agricultural and barn conversions
Mixed-use Developments
Lending Parameters
Across England and Wales, primarily south of Manchester, and within Cardiff and Newport postcodes, extending down to Plymouth in the south West.
LOAN AMOUNT
£500,000-£4,000,000
Loan to GDV
Up to 65%
LOAN to COSt
Up to 90%
LOAN TO VALUE
UP TO 70%
LOAN TERM
UP TO 18 Months
HIGHLIGHTS
Fast Stage Payments
We aim to release stage payments within 48 hours of site inspection, ensuring your development maintains momentum and cash flow remains uninterrupted.
Relationship-Led Approach
We meet every client in person and take a genuine interest in each project. We’re not just a lender; we’re a long-term funding partner.
Flexibility Throughout
We understand that property developments don’t always go exactly to plan. Our approach remains flexible throughout the loan term, helping you adapt and keep your project on track.
Transparent Pricing
Clear, straightforward pricing from day one. No hidden costs, no unnecessary complexity.
BROKER-FRIENDLY
We work closely with brokers and are happy to include additional introducer fees within the loan structure where required, ensuring smooth transactions for all parties.
Complex and Structured Development Finance
Some developments require a more structured approach. We tailor funding around the specifics of each project:
- Overage and uplift agreements
- Deferred land payments
- Option agreements
- Joint venture structures
FAQs
Magnet capital FAQ
Why should I choose Magnet Capital for development finance?
Unlike a lot of lenders, Magnet Capital is a specialist property development finance lender, focused solely on funding residential development projects.
Meaning, we are not distracted by multiple product lines. We combine fast decision-making, clear communication, and a hands-on approach to structure finance that performs throughout the life of your development.
You can learn more about our approach on our About Us page.
What types of developments do Magnet Capital lend on?
We offer ground-up development finance, conversion development finance, and heavy refurbishment finance.
This includes a wide range of property development schemes, from new-build residential sites to complex conversion and enhancement projects.
How much does Magnet Capital Lend?
Magnet Capital provides development finance loans from £500,000 up to £4,000,000.
We can fund up to:
- 100% of developments costs
- 70% of purchase price or current site value
Each facility is structured around the specifics of the project, ensuring the funding aligns with your development strategy.
You can view our full lending criteria on our development finance criteria page.
How long does it take to get a decision in principle?
Once key project information is received, we can often provide a decision in principle within minutes.
If you have a project in mind, you can submit an enquiry, and a member of the team will be in touch.
We understand that time is critical in property development, which is why we prioritise fast, clear decision making from the outset.
Where does Magnet Capital lend?
Magnet Capital will lend across England and Wales, primarily south of Manchester, and within Cardiff and Newport postcodes, extending down to Plymouth in the South West.
We focus on locations where we have strong market knowledge ensuring we can support projects with a clear understanding of local dynamics.
Is Magnet Capital a regulated or unregulated lender?
We provide unregulated development finance for business-purpose property development projects.
We are a member of the Bridging & Development Lenders Association (BDLA), demonstrating our commitment to high standards, transparency and best practice within the development finance market.
How much does development finance cost?
The cost of a development loan varies depending on the project, but typically includes interest, arrangement and exit fees, and standard third-party costs such as surveying and legal fees.
We provide clear, transparent pricing from the outset, with no hidden costs. Each facility is structured around the specifics of the project to ensure the most appropriate and cost-effective solution.
How do I apply for development finance?
You can apply for development finance by submitting key details about your project, including the site, costs and developer experience via our enquiry form.
Once received, a member of the team will review your project and be in touch to discuss the opportunity in more detail.
Where appropriate, we will arrange a site visit to gain a full understanding of the scheme and support the structuring of your funding.
Who does Magnet Capital lend to?
We lend to individuals and companies undertaking residential property development projects for business purposes.
We work with a wide range of borrowers, from first-time developers starting their property journey through to experienced developers with a proven track record.
How long does the process take?
The overall timescale for arranging development finance typically depends on the legal process and how quickly all parties can progress the transaction.
At Magnet Capital, terms can usually be issued quickly following an initial review. From sign-up to completion, the legal process typically takes around 6-10 weeks on average.
Working with an experienced solicitor who specialises in commercial property finance is key to ensuring a smooth and efficient transaction.
DEVELOPMENT FINANCE FAQ
What is development finance?
Development finance is a type of short-term property finance used to fund the construction, conversion or refurbishment of residential and mixed-use developments.
It is typically used by property developers to cover costs such as land acquisition, build costs and project expenses, with the loan repaid through the sale or refinance of the completed development.
Magnet Capital provides development finance solutions tailored to residential development projects across England and Wales, supporting developers from initial funding through to exit.
How does development finance work?
Development finance is used to fund property development projects, from site acquisition through to construction and exit.
The process typically works as follows.
1. Initial assessment
The lender reviews the project, including the site, build costs, developer experience and exit strategy.
2. Loan underwriting
Surveyors will carry out an initial site visit, confirming the valuation and the build costs of the project. Once approved, terms are issued outlining the loan amount, interest rate and loan structure. Legal due diligence is also progressed during this stage.
3. Site acquisition funding
An initial advance is released to fund the purchase of the site, repay existing debt or release equity, depending on the structure of the transaction.
4. Staged drawdowns
Further funds are released in stages as the development progresses, typically aligned with the build milestones and monitored by an independent monitoring surveyor.
5. Build completion
The development reaches practical completion and the final value of the project is established.
6. Exit and repayment
The loan is repaid either through the sale of the completed units or by refinancing onto a longer-term facility.
Our approach is to work closely with developers throughout each stage to ensure funding is structured efficiently from acquisition through to exit.
What valuations and surveys are required for development finance?
Development finance typically requires both a valuation report and ongoing monitoring by a quantity surveyor to assess the viability and progress of a project.
A valuation is carried out at the outset to confirm the current market value of the site, the projected gross development value (GDV), and the overall suitability of the scheme.
In addition, an independent quantity surveyor (QS) is appointed to review the build costs and monitor progress throughout the development. This ensures funds are released efficiently to maintain a smooth project cash flow.
At Magnet Capital, we work with a trusted panel of experienced professionals who support clients throughout the lifecycle of a project and are on hand to provide guidance where needed.
How long does it take to receive a development finance drawdown?
Once the quantity surveyor has signed off on progress, they will agree the value of works completed and produce a report for the lender.
Following receipt of the surveyor’s report, funds are typically released within 48 hours of the site inspection, subject to final checks.
We take a pragmatic, common-sense approach alongside our surveyors, with our team always on hand to assist.
Do I need experience to get development finance?
While experience is beneficial, it is not always essential to obtain development finance.
We consider each application on its own merits. First-time developers can often secure funding if the project is well-structured and supported by a strong professional team, such as experienced contractors, architects and project managers.
For more complex or larger schemes, a proven track record may be required. However, for smaller or straightforward developments, we are often able to support clients entering property development.
What is the difference between regulated and unregulated finance?
Regulated finance is typically used when a loan is secured against a property that is, or will be, occupied by the borrower or their immediate family. These loans are subject to stricter consumer protection rules and are regulated by the Financial Conduct Authority (FCA).
Unregulated finance, on the other hand, is used for business purposes, such as property development or investment. As the borrower is acting in a business capacity, these loans are not subject to the same level of regulation and can often be arranged more quickly and flexibly.
At Magnet Capital, development finance is provided on an unregulated basis and is used for business purposes.
How is interest calculated on development finance?
Interest on development finance is typically calculated on a rolled-up basis, meaning it only accrues on funds that have been drawn down throughout the project and is repaid at the end of the term, usually upon sale or refinance.
Alternatively, borrowers may choose to service interest monthly, depending on their preference and the loan structure.