Development Finance in Hackney
Specialist funding for property developers across Hackney. Whether you're building new homes near Dalston, converting a warehouse in Stoke Newington, or refurbishing period properties in Hackney Wick, we source competitive development finance from over 100 lenders.
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Maximum
70%
Loan to Cost
Maximum
65%
Gross Dev Value
From
0.65%
Monthly Rate
Months
6-36
Loan Term
What Is Development Finance?
Development finance is a specialist form of short-term property funding designed specifically for construction and development projects. Unlike a traditional mortgage that provides a single lump sum against an existing property, development finance is structured around the build programme, with funds released in stages as construction progresses and milestones are achieved.
For Hackney property developers, development finance provides the capital needed to acquire development sites and fund construction costs. The loan is secured against the development site and the works being carried out, with the lender's exposure managed through staged drawdowns verified by an independent monitoring surveyor. This structure protects both the lender and the developer, ensuring funds are available when needed and that the project stays on track.
Interest on development finance is typically “rolled up” and added to the loan balance rather than being paid monthly. This means you don't need to service the debt during the construction period, with all interest and fees settled from the sale proceeds or refinance at the end of the project. This cash flow benefit is particularly valuable for developers who need to concentrate their capital on the build itself.
The amount you can borrow is determined by two key metrics: the Loan to Cost (LTC) ratio, which measures the loan against the total project cost including land acquisition, construction costs, and professional fees; and the Loan to Gross Development Value (GDV), which measures the loan against the projected end value of the completed development. Lenders in Hackney typically offer up to 70% LTC and 65% GDV, with the lower of the two determining your maximum facility.
How Development Finance Works in Hackney
From initial enquiry to final drawdown, development finance follows a structured process designed to manage risk and ensure your Hackney project is funded efficiently at every stage.
Project Appraisal
Submit your project details including site information, planning status, build costs, and projected GDV. We provide indicative terms within 24 hours, outlining the likely loan amount, rate, and structure for your Hackney development.
Lender Sourcing
We search our panel of 100+ development finance lenders to identify the best terms for your specific project. We consider not just the rate but also the lender's appetite for your project type, their speed of execution, and the flexibility of their drawdown terms.
Valuation & Legal
An RICS-qualified valuer inspects the site and provides a Red Book valuation including the projected GDV. Simultaneously, solicitors carry out legal due diligence on the title, planning permissions, and building regulations compliance.
Drawdown & Build
The initial tranche funds the site acquisition. Subsequent drawdowns are released against QS-certified construction progress, typically monthly or at key build milestones. Interest is rolled up and settled upon project completion.
Types of Development Projects We Fund
From ground-up new builds to complex conversions, we source development finance for every type of property project across Hackney.
Ground-up residential developments from single houses to large apartment schemes. Hackney offers excellent opportunities for new residential schemes, particularly in regeneration areas like London Fields, Hackney Wick, and along the Hackney Cut. We fund schemes from 1 to 100+ units.
- Houses, apartments, and maisonettes
- Affordable housing compliant schemes
- Build-to-rent developments
- Modular and off-site construction
Commercial-to-residential conversions including office buildings, warehouses, pubs, churches, and other non-residential properties. Hackney has significant conversion potential, particularly in Stoke Newington, Hoxton, and along Kingsland Road where Permitted Development Rights can be utilised.
- Office to residential (Class MA)
- Warehouse and industrial conversions
- Pub and retail conversions
- Heritage building adaptive reuse
Comprehensive refurbishment projects that go beyond cosmetic updates to include structural alterations, extensions, change of layout, and significant building works. Hackney's Victorian and Georgian housing stock provides extensive refurbishment opportunities.
- Structural alterations and extensions
- Sub-division into multiple units
- Basement and loft conversions
- Period property restoration
Schemes combining residential units above commercial, retail, or community space. Hackney Council actively encourages mixed-use development, particularly along key high streets such as Kingsland High Street, Mare Street, and Stoke Newington Road.
- Residential above retail or office
- Live-work units
- Community hub developments
- Creative workspace with residential
Who Can Access Development Finance?
Development finance is available to a wide range of borrowers undertaking property development projects in Hackney. Lenders assess applications based on a combination of the project's viability and the developer's experience and financial standing. Here are the key criteria most lenders evaluate:
Developer Experience
Experienced developers with a proven track record of completing similar projects will access the most competitive rates. First-time developers can still secure funding but may face slightly higher rates and lower leverage.
Project Viability
The scheme must demonstrate a realistic profit margin, typically 15-20% on cost for residential schemes. A detailed project appraisal with accurate costings is essential.
Planning Consent
Full planning permission or Permitted Development Rights provide the strongest basis for a loan application. Some lenders consider outline planning or pre-application schemes.
Professional Team
Lenders want to see a competent professional team including an architect, quantity surveyor, structural engineer (where applicable), and a reputable main contractor or experienced project manager.
Equity Contribution
Most lenders require the developer to contribute equity of 25-30% of total project costs. This can be reduced to 10% or less by incorporating mezzanine finance into the capital stack.
Exit Strategy
A clear and credible exit strategy is essential, whether that is selling completed units on the open market or refinancing onto a longer-term mortgage for retained rental income.
Hackney Market Insight
Hackney continues to be one of London's most dynamic development markets. The borough benefits from Dalston's continued expansion, London Overground connectivity at Hoxton, Olympic legacy regeneration around Shoreditch, and strong creative sector demand in Stoke Newington. Average property values across the borough range from £430,000 in London Fields to £650,000 in Dalston, providing developers with strong GDV figures that underpin viable development finance proposals.
N1-E8
Postcodes Covered
10+
Areas Served
Understanding the Capital Stack
The capital stack is the hierarchy of funding sources used to finance a development project. Understanding how each layer works is essential for structuring the optimal funding package for your Hackney development.
10-30%
of costs
Developer Equity
Your own capital investment sits at the top of the stack, bearing the highest risk but capturing all the development profit. This is your 'skin in the game' that gives lenders confidence in your commitment to the project.
10-20%
of costs
Mezzanine Finance
Optional second charge funding that sits between the senior debt and your equity. Mezzanine finance reduces the amount of equity you need to contribute, typically at rates of 1-1.5% per month, enabling you to take on more or larger projects simultaneously.
60-70%
of costs
Senior Development Loan
The primary development finance facility secured as a first charge against the property. This forms the largest portion of the capital stack and attracts the lowest interest rates due to its priority position in the event of any issues.
By combining senior development finance with mezzanine funding, you can reduce your equity requirement to as little as 10% of total project costs. For developers looking to eliminate equity contributions entirely, development equity partnerships offer up to 100% funding in exchange for a share of the profit.
Development Finance vs Bridging vs Mezzanine
Understanding the differences between property finance products helps you choose the right solution for your Hackney project.
| Feature | Development Finance | Bridging Finance | Mezzanine Finance |
|---|---|---|---|
| Purpose | Ground-up builds, conversions, heavy refurb | Acquisition, chain breaks, light refurb | Top-up funding to reduce equity |
| Max LTC / LTV | Up to 70% LTC / 65% GDV | Up to 75% LTV | Up to 90% combined LTC |
| Typical Rates | From 0.65% per month | From 0.55% per month | From 1.0% per month |
| Term | 6-36 months | 1-18 months | Aligned with senior loan |
| Drawdown | Staged against QS certification | Single advance at completion | Aligned with senior drawdowns |
| Security | First charge on development site | First or second charge | Second charge behind senior |
| Interest | Rolled up (paid at exit) | Rolled up or monthly serviced | Rolled up (paid at exit) |
| Speed | 3-6 weeks to completion | 5-10 working days | Aligned with senior loan |
| Best For | Construction & development projects | Speed and short-term needs | Reducing equity requirement |
Development Finance for a Dynamic Borough
Hackney is one of the most active property development markets in London. The borough has undergone extraordinary transformation over the past three decades, from the rise of Dalston as a global financial centre to the creative renaissance of Stoke Newington and Shoreditch's fringe. This ongoing regeneration creates a constant pipeline of development opportunities for astute developers.
The London Overground at Hoxton has been a game-changer, connecting Hackney directly to Heathrow, the West End, and the City with journey times slashed dramatically. This infrastructure investment continues to drive property values upward, particularly in areas within walking distance of the new station. Developers who understand these transport-driven value uplift dynamics can structure highly profitable schemes that lenders are eager to fund.
Our team has deep knowledge of the Hackney planning environment, including the borough's Local Plan policies, conservation area constraints, tall building zones in the Haggerston, and the specific requirements of each area's character. This local expertise allows us to match your project with lenders who have genuine appetite for Hackney developments, resulting in faster decisions and more competitive terms.
Strong GDV fundamentals: Average property values in Hackney range from £430,000 in emerging areas to £650,000 in prime locations, supporting viable development appraisals.
Development Finance FAQs
Frequently asked questions about development finance for Hackney projects.
Development Finance Across Hackney
We provide development finance throughout every area of Hackney. Select your area to learn more about local development opportunities.
Other Finance Solutions
Development finance is just one piece of the puzzle. Explore our other specialist property finance solutions for Hackney developers.
Fast short-term funding completing in 5-10 working days. Ideal for auction purchases, chain breaks, and light refurbishment projects in Hackney.
Learn MoreSecond charge funding to top up your senior development loan, reducing the equity you need to contribute to as little as 10% of total project costs.
Learn MoreEquity partnership and JV structures providing up to 100% of project costs. Ideal for developers who want to preserve capital for multiple projects.
Learn MoreReady to Fund Your Hackney Development?
Get competitive development finance terms from 100+ specialist lenders. Our team will source the best deal for your project and provide indicative terms within 24 hours.
- Rates from 0.65% per month
- Up to 70% Loan to Cost
- Decisions in 24 hours
- 100+ development finance lenders
- Expert Hackney market knowledge
- No obligation initial consultation