Development exit finance for apartment schemes
The facility that clears development finance on a finished block of flats at practical completion, then carries the runway while the apartments sell. A block differs from an estate of houses in one word, concentration: the whole scheme sits inside one structure, on one freehold title, valued as a single lot and sold under one set of leases. That shapes the exit, from the aggregation discount the valuer applies, to the per-block mortgage caps that throttle sales, to the leasehold structure needed before a flat can legally complete. We arrange and place this funding with specialist bridging lenders and debt funds working on finished apartment schemes.
What makes an apartment block different to fund at exit?
Development exit finance for an apartment scheme is a short-term bridging loan that repays the development facility on a finished block of flats at practical completion, then carries the runway while the units sell. What sets a block apart from an estate of houses is concentration: everything the developer owns sits inside one structure, on one freehold title, valued as a single lot and sold under one set of leases. On an estate, each house is its own asset with its own buyer and mortgage valuation. In a block, the flats rise and fall together. That concentration shapes the exit, from how the valuer prices the scheme, to how fast owner-occupiers can complete, to what has to exist legally before a single flat can change hands. It is why a block usually needs a longer, more carefully structured exit than a row of finished houses.
Three features of a single block drive the exit. First, the valuer rarely signs off the simple sum of the individual flat prices. When many similar units would reach the market at once, a RICS valuer applies an aggregation or bulk discount for the time and price risk of selling them all, so the figure the lender sizes against is a net development value across the whole block, not the headline retail total. Second, mainstream mortgage lenders cap their exposure to any one block, often funding only a limited share of the flats, so once that ceiling is reached the next owner-occupiers cannot get a mortgage there and completions stall until earlier buyers refinance. Third, nothing completes legally until the leasehold and estate management structure is built. Miss any of these and the sales runway does not start.
We work as a broker and introducer; we are not a lender, and we carry no FCA authorisation, so what we arrange counts as unregulated commercial lending. Development exit finance for apartment schemes is something we place with specialist bridging lenders and debt funds openly active in this space, among them LendInvest, Octane Capital, Together and United Trust Bank, on the basis that their criteria change and nothing here is an offer. We size the facility on net development value, structure the interest so the developer's cash flow survives a throttled sales runway, and hold a bulk sale to an investor in reserve as a fallback exit. The full picture sits on our pillar page at /solutions/development-exit-loans/. All figures are indicative and illustrative, subject to principal sign-off, and never an offer of finance.
- Clears the development facility on a finished block of flats at practical completion
- Sized on net development value across the whole block after a bulk or aggregation discount, not the sum of individual flat prices
- Funds the sales runway while owner-occupier completions are throttled by per-block mortgage exposure caps
- Needs the leasehold and estate management structure in place before any flat can legally complete
- Carries a bulk sale of the block to an investor as a fallback exit if retail sales stall
- Arranged with specialist bridging lenders and debt funds that work on finished apartment schemes
Indicative terms
- Loan to value (LTGDV)Up to roughly 70 to 75 percent of the block's net development value, indicatively
- Valuation basisNet development value across the whole block, after a bulk or aggregation discount, not the sum of individual flat prices
- Term6 to 18 months, covering the sales runway across the block
- RateAround 0.65 to 0.95 percent per month indicatively, illustrative, undercutting the development loan it swaps out
- RepaymentInterest rolled up or retained, with part-redemptions as each flat completes
- SecurityFirst legal charge over the freehold and the completed block
- Key testsPractical completion, cladding and EWS1 status, the leasehold structure, per-block mortgage exposure
- ExitIndividual leasehold sales, a bulk sale of the block to an investor, or a refinance onto term lending
Illustrative bands. Each lender, scheme and borrower lands differently, and none of this is an offer of finance.
Built for
- Developers whose block has completed but whose flats are selling slower than an estate of houses would
- Developers hitting mortgage-lender exposure caps that throttle owner-occupier completions on a single block
- Developers of office-to-residential conversions carrying cladding or EWS1 legacy questions
- Developers who need the leasehold and estate management structure finished before flats can complete
- Developers weighing a retail sell-down against a bulk sale of the whole block to an investor
Test the case
Indicative terms back with you by the next working day.
How a block exit facility is arranged and drawn
Value the block on net development value
We confirm the scheme has reached practical completion, then have the block valued on net development value: the aggregate retail value of the flats less the valuer's bulk or aggregation discount, rather than on the headline sum of unit prices.
Repay the development facility
We arrange an exit bridge that clears the development loan outright in one drawdown, typically at a lower rate, termed to cover a realistic sales runway given the per-block mortgage caps that limit how fast owner-occupiers can complete.
Work through the sales runway
The developer markets and completes on the flats without the pressure of a maturing loan, with the leasehold and estate management structure in place so each sale can complete, and can release capital above the senior debt.
Redeem by sales, a bulk sale or refinance
The bridge is repaid as individual leasehold sales come in flat by flat, in one line through a bulk sale of the block to an investor, or by a refinance onto term debt on any units retained and let.
What lenders check on a completed block before drawing
Lenders are most comfortable once the block has reached practical completion, with the building control sign-off, the structural warranty and NHBC or equivalent cover all in place, because by then the construction risk that set the development loan's price has gone. They then examine the features specific to a block. They want the leasehold structure evidenced: the lease form, the freehold or resident management company arrangement, the service charge budgets and any managing agent appointment, because no flat completes without them. On conversions, particularly office-to-residential schemes, they check the cladding and external wall position and will ask for an EWS1 form where the building height or materials call for one, since a legacy fire-safety question can freeze mortgage lending across the whole block. They test the realistic sales rate against known per-block mortgage exposure caps, and they want a credible fallback, usually a bulk sale to an investor. We package the completion evidence, the legal structure and the survey position so the case is presented at its strongest.
Sizing the loan on net development value, not headline GDV
Development exit finance for a block is sized on net development value, not on the headline sum of the individual flat prices. A RICS valuer takes the aggregate retail value of every unit, then applies a bulk or aggregation discount for the risk of bringing so many similar flats to one market over a limited period, and the loan advances against that lower net figure. Indicatively lenders go up to 70 to 75 percent of it, which is often still higher than the development loan being repaid, so there can be headroom to release capital above the senior debt for the next site. Because completions are throttled by per-block mortgage exposure caps, the facility is termed for a realistic runway of six to eighteen months, and interest tends to be rolled or retained, meaning the developer is not servicing debt out of a sales stream that arrives in steps. As each flat completes, the net proceeds part-repay the loan and that unit is released from the charge. All bands are illustrative and not an offer.
What a block exit bridge costs and what moves it
The reason to move onto a block exit bridge is the saving: development finance is priced for construction risk that no longer exists once the flats are built, so refinancing onto a completed-scheme bridge usually cuts the monthly cost while lifting the maturity pressure that would otherwise force a discounted bulk sale. Indicative pricing runs at roughly 0.65 to 0.95 percent per month, illustrative only, with interest normally rolled up or retained in place of being serviced. Beyond the rate, budget for a lender arrangement fee of indicatively about 1 to 2 percent, a valuation, both sides' legal costs and on occasion an exit fee. The service charge and ground rent structure feeds in too, because how the leases set ongoing charges affects both saleability and an investor's yield on any bulk purchase, so it is worth settling before marketing. The largest lever is time: a block that clears in six months costs a fraction of one that runs the full eighteen. We set out our arranger fee in writing and quote the all-in cost over the expected runway. the figures are working models, not offers of finance.
A retail sell-down against a bulk investor sale
The main strategic choice on a completed block is a retail sell-down against a bulk sale, and a block exit bridge exists to keep that choice open. Selling the flats one by one to owner-occupiers achieves the highest total price, but it is the slowest route and runs straight into per-block mortgage exposure caps that limit how many buyers can complete at once. Selling the whole block in one line to an investor is fast and certain, but the buyer prices in the aggregation discount and their own required yield, so the developer trades margin for speed. A development exit bridge funds the retail runway while holding the bulk sale in reserve, so the developer is not forced to accept an investor's number just because the development loan has matured. Where some flats are retained and let, the usual order is the exit bridge first, followed by a refinance onto buy-to-let or investment term lending, or stock finance against the last units at /solutions/unsold-new-build-stock-finance/. We map the route so the block sits on the right debt for whatever it is about to do next.
Apartment schemes: common questions
Why is an apartment block harder to exit than an estate of finished houses?
Because a block concentrates the whole scheme into one structure, on one freehold title, valued as a single lot and sold under one set of leases. On an estate each house is a separate asset with its own buyer and mortgage valuation, whereas in a block the valuer applies a bulk discount for selling many similar flats at once, and mortgage lenders cap how many buyers they will fund in any one building. Those two features slow the sales runway and change how the exit has to be sized. It is why a block often needs a longer, more carefully planned exit.
How does a valuer's bulk or aggregation discount affect what I can borrow on a block?
A RICS valuer will not usually sign off the simple sum of the individual flat prices on a whole block. They take the aggregate retail value and apply a bulk or aggregation discount to reflect the risk of bringing so many similar units to one market, and the result is a net development value the lender sizes against. Development exit finance advances indicatively up to 70 to 75 percent of that net figure, not of the headline retail total, though that is still often more than the development loan being repaid.
What are per-block mortgage exposure caps and how do they slow my sales?
Mainstream mortgage lenders limit how much they will lend against any single block, often funding only a limited share of the flats in one building. Once that ceiling is reached, the next owner-occupier buyers cannot get a mortgage there and their completions stall until earlier buyers refinance elsewhere or the cap resets. This throttles a retail sell-down in a way that does not happen on an estate of houses, so we term the facility for a realistic runway and keep a bulk sale in reserve.
What leasehold and estate management set-up has to be in place before flats can complete?
No flat in a block completes legally until the leasehold structure exists: the lease form drafted, the freehold or a resident management company in place, service charge budgets set and, on many schemes, a managing agent appointed. Lenders want this evidenced before they draw the exit facility, because a sales runway cannot start without it. Getting the service charge and ground rent terms right before marketing also protects saleability and any investor's yield on a bulk purchase.
Do cladding and EWS1 checks affect development exit finance on an office-to-residential conversion?
Yes, they can be decisive on a conversion. Lenders check the cladding and external wall position, and where the building height or materials call for it they will ask for an EWS1 form, because a legacy fire-safety question can freeze mortgage lending across the whole block and stop owner-occupiers completing. We surface the survey and EWS1 position early so it is resolved rather than discovered late, and we structure the runway around it.
Can I sell the whole block to an investor instead of selling the flats one by one?
Yes, and a bulk sale to an investor is the standard fallback exit on a block. It is faster and more certain than a retail sell-down, but the buyer prices in the aggregation discount and their own required yield, so the developer usually trades margin for speed. A development exit bridge keeps both routes open: it funds the retail runway while holding the bulk sale in reserve, so you are not forced to accept an investor's number just because the development loan has matured.
How are service charge and ground rent structured, and does it affect the exit?
Service charge and ground rent are set in the leases and govern the ongoing cost of owning each flat, so how they are structured feeds directly into saleability and into any investor's yield on a bulk purchase. Onerous or poorly drafted terms can deter owner-occupier buyers and their lenders, slowing the retail runway the exit facility funds. We flag it as part of confirming the exit is credible before the facility draws.
Funding a completed apartment schemes scheme?
Tell us what you built and where sales or lettings stand. A straight view on fundability and indicative terms follows inside one working day.