Build to Rent Development Finance
Build to rent development finance funds the construction of purpose-built rental accommodation held as an income asset rather than sold unit by unit, which changes both the underwriting and the exit. Senior debt reaches around 65% of gross development value and 85% of cost, priced from roughly 7.5% to 11% per annum over 24 to 36 months including a lease-up period. Because the exit is a refinance onto investment debt valued on stabilised net operating income — not a sales programme — lenders scrutinise the rental assumptions, the operating cost ratio and the letting strategy as closely as the build programme.
Criteria and pricing
What lenders on our panel will typically do on this product today.
- Loan to GDV
- Up to 65% on investment value
- Loan to cost
- Up to 85%
- Rate
- ≈ 7.5% – 11% p.a. on the drawn balance
- Term
- 24 – 36 months including lease-up
- Arrangement fee
- 1.5% – 2%; exit fee 1%
- Scheme size
- Typically 20 units and above
- Valuation basis
- Stabilised net operating income and yield, not unit sale values
- Operating assumptions
- Void and management cost ratios of 20%–30% of gross rent
- Exit
- Investment refinance at stabilisation, or forward sale to an institution
Worked example — 34-unit BTR block
- Site and acquisition costs
- £1,750,000
- Build cost
- £6,300,000
- Fees and contingency
- £780,000
- Total cost
- £8,830,000
- Stabilised gross rent
- £884,000 p.a.
- Net operating income after 25% costs
- £663,000
- Investment value at 5.25% yield
- ≈ £12,600,000
- Senior facility at 62% of GDV
- ≈ £7,800,000
Figures are typical UK market ranges as at 2026 and are indicative only — your terms depend on the asset, the exit and the lender we place the case with.
Who this works for — and who it does not
You are likely to qualify if
- Detailed planning consent for a purpose-built rental scheme
- A rental evidence pack supporting the assumed rents from genuinely comparable local stock
- A lettings and management strategy, ideally with an operator appointed
- Development experience of comparable scale, or a credentialled contractor and project team
- Equity of 15% of total cost, or land equity supported by valuation
This is the wrong product if
- Small schemes below roughly 20 units, which fund better as standard development finance
- Schemes relying on rents materially above local evidence
- Sponsors with no plan for the lease-up period between practical completion and stabilisation
- Locations with thin rental demand or heavy incoming supply
What actually happens, and when
- Week 1–2
Rental assumptions tested
We benchmark the assumed rents and the operating cost ratio against local evidence first — an optimistic NOI inflates the GDV and collapses under the valuer's review.
- Week 2–4
Terms
Heads of terms from lenders that value BTR on an income basis rather than pricing it as build-to-sell.
- Week 4–8
Valuation and QS
Valuation on both investment and residual bases, plus monitoring surveyor review of budget and programme.
- Week 8–12
Legals and drawdown
Facility completed, land advance released, build drawdowns monthly in arrears.
Frequently asked
Request indicative terms
Four details are all a lender needs to price a case: how much, what secures it, when you need it and how it is repaid. Send those and we come back with realistic terms — or tell you plainly that the case will not place.
Request indicative terms
Tell us the four things every lender asks first. We come back with realistic terms, usually the same working day.