Land bridging loans finance the purchase of raw or residential development land. These loans are more specialised than standard residential bridging. Land lenders assess properties based on development potential rather than immediate market value.

Types of Land Suitable for Bridging

Residential development land qualifies for bridging finance. Commercial development land attracts competitive rates. Agricultural land can access bridging in some cases. Land with planning permission commands better rates than unplanned land. Land near established towns attracts more competitive pricing.

Land Development Bridging Process

Purchase the land using bridging finance. Obtain planning permission (if not already granted). Arrange permanent development finance. Construct properties or hand over to a developer. Exit the bridge through development finance.

Development Finance Exit Strategies

Construction finance takes over after land purchase. Long-term development mortgages refinance the land borrowing. Property sales from the completed development repay the bridge. Some lenders offer one-stop development finance covering land and build.

Land Bridging Loan Statistics

Average land bridging loan: £150,000 to £5,000,000. Land loans typically run 12-24 months. Lenders approve 65% of land bridging applications. Land with planning permission attracts 0.5% lower rates. Residential land commands lower rates than commercial or industrial.

Interest Rates for Land Bridging

Land bridging attracts higher rates than residential property bridging. Typical rates range from 0.8% to 1.8% monthly. Unplanned land attracts premium rates due to higher risk. Planning permission can reduce rates by 0.3% to 0.5%. Location influences pricing significantly.

Planning Permission and Bridging Loans

Lenders assess planning potential carefully. Outline planning permission may suffice for bridging. Detailed planning permission secures better rates. Land without planning increases exit risk. Specialist lenders focus on development potential assessment.

FAQ Section

Q: Can I access bridging for land without planning permission? A: Yes, though rates are typically higher. Planning potential matters more than existing permission.

Q: What is the typical loan-to-value for land bridging? A: Land LTV typically caps at 70-75%. This is lower than residential property bridging.

Q: How long do land bridging loans typically run? A: Most land loans mature in 12-24 months. Some extend to 36 months for complex developments.

Q: Can I extend the land bridging loan if planning takes longer? A: Yes. Most lenders allow extensions of 6-12 months for planning delays.