Finish and exit development finance is a short-term loan that repays your current development loan lender and funds the remaining work, then gives you time to sell.
It suits schemes that have overrun on cost or time and no longer qualify for standard development exit finance.
Rising costs are one common cause of trouble. Construction material prices for all work rose 5.9% in the year to July 2026, according to the Department for Business, Innovation, Science and Trade. A budget set a year earlier can look thin once the steel and pipework arrive.
Lenders expect a clear plan, a realistic cost to complete and a credible way to repay. Starting the conversation well before your current term ends gives you far more room to find terms that work.
Finish and exit development finance key figures at a glance
The figures below show the pressures that push schemes into this kind of loan, along with the rules and warranties that shape it.
| Figure | Value | Period | Source |
|---|---|---|---|
| Construction material prices, all work | Up 5.9% on a year earlier | July 2026 compared with July 2025 | Department for Business, Innovation, Science and Trade |
| Fabricated structural steel prices | Up 20.9% | 12 months to July 2026 | Department for Business, Innovation, Science and Trade |
| Construction company insolvencies, England and Wales | 3,873 cases, 17% of cases with an industry recorded | 12 months to 30 September 2026 | Insolvency Service |
| Average new build price, England | £367,000, up 0.2% on a year earlier | June 2026 | UK House Price Index |
| FCA test for a regulated mortgage contract | Individual or trustee borrower, and at least 40% of the land used, or intended for use, as or in connection with a home | FCA guidance, checked October 2026 | FCA Handbook, PERG 4.4 |
| NHBC Buildmark cover on new homes | 10 years: 2 years builder warranty, then 8 years insurance | Checked October 2026 | NHBC |
How does finish and exit development finance work?
A finish and exit loan replaces your existing development finance with a new facility from another lender. The new loan repays the old lender and releases further funds in stages as work progresses. It then runs long enough for you to sell the completed units.
Property development finance funds the purchase of a site and the build, with money released after the lender’s surveyor has checked progress. Many lenders roll the interest up, which means no monthly payments and one repayment with the loan at the end.
Finish and exit finance follows the same pattern but starts partway through the build. The lender looks at the work already done and the cost to complete. It also looks at the gross development value (GDV), the total you expect the finished scheme to sell for.
The lender will want a first charge over the development, giving it first claim on repayment if the loan is not cleared.
Published terms for these loans commonly run from 3 to 18 months at the time of writing, with a few lenders going up to 24. You repay from unit sales or by refinancing onto a longer-term loan, so a clear exit strategy matters from the first conversation.
Typical terms at the time of writing
These ranges come from lender and broker criteria published in October 2026. Terms differ between lenders and change often, so confirm current figures with a broker before you plan around them.
| Feature | Typical position |
|---|---|
| Loan term | Commonly 3 to 18 months, up to 24 with a few lenders |
| Total borrowing | Around two thirds to 70% of GDV, including rolled-up interest and fees |
| Minimum loan | Often £500,000 or more |
| Arrangement fee | Commonly 1% to 2% of the loan |
| Exit fee | Some lenders charge up to 1%, depending on the term |
| Interest | Usually rolled up and repaid at the end |
| Borrower | Usually a limited company or special purpose vehicle |
| Developer profit | Some lenders ask for at least 20% profit on cost |
| Scheme type | Residential and mixed use, with some lenders also funding commercial schemes |
How is finish and exit development finance different from development exit finance?
Development exit finance is for schemes that are finished or close to it, while finish and exit finance covers schemes that still need substantial work.
Because exit lenders usually want a building at practical completion, the point where the work is finished apart from minor snagging items, a stalled scheme rarely qualifies.
| Stage | Build status | What the loan does |
|---|---|---|
| Development finance | Site purchase and construction | Funds the land and the build in stages |
| Finish and exit finance | Partly built, over time or over budget | Repays the old lender, funds the remaining work, then gives time to sell |
| Development exit finance | Complete or nearly complete | Repays the development loan and gives time to sell or refinance |
Building control sign-off matters on both sides of that line. As GOV.UK explains, work done without approval leaves you without the compliance certificates you may need when you sell.
Warranties matter too. NHBC’s Buildmark cover lasts 10 years on newly built homes. It starts with a two-year builder warranty after legal completion, followed by eight years of insurance against defects in certain parts of the home. Buyers’ mortgage lenders usually want a warranty or an equivalent professional certificate, so a scheme without one can be hard to sell.
Some facilities include a pre-agreed release of equity once practical completion, final building control sign-off and a new homes warranty are in place. If you hope to fund your next project from this one, ask about that feature at the start.
When might you need finish and exit development finance?
Four problems commonly push a scheme into this position: costs climb, sales slow, a contractor fails or the existing lender will not extend.
Rising build costs
According to the Department for Business, Innovation, Science and Trade, new housing materials rose 4.9% in the year to July 2026, while fabricated structural steel rose 20.9%. An appraisal built on older quotes allows for neither, and the shortfall falls to you.
Slower sales
The UK House Price Index put the average new build in England at £367,000 in June 2026, up only 0.2% on a year earlier. Existing resold homes rose 1.3%. A new lender will lend against its own valuer’s view of your GDV, which may sit below an appraisal that assumed faster growth.
A failing contractor
Construction company insolvencies in England and Wales totalled 3,873 in the 12 months to 30 September 2026, according to the Insolvency Service. That is down 2% on the previous year but still the most of any industry. A replacement builder means a fresh cost to complete, and any new lender will want to see the new contract alongside the revised figures.
A lender that calls time
Your existing lender may refuse to extend, or may ask for repayment when the term ends before the work does. A finish and exit loan can let you move to a lender willing to back the revised plan.
How much can you borrow with finish and exit finance?
Lenders cap total borrowing against GDV. At the time of writing, ceilings of around two thirds to 70% of GDV are common. That figure includes rolled-up interest and fees as well as the cash you draw.
The loan has to cover three things:
- your existing development loan
- the cost of finishing the build
- the interest and fees that roll up
If those add up to more than the ceiling, you need extra equity or another source of funding.
A worked example
For example, say your existing lender is owed £520,000, finishing the work costs £110,000 and £70,000 covers rolled-up interest and fees.
The new facility would be £700,000. If the finished scheme is worth £1,100,000, the loan is about 64% of GDV, which sits below the 70% top of the usual range. That is £700,000 divided by £1,100,000. This is an illustration only and not a quote.
In the same illustration, a valuer who puts the finished scheme at £950,000 changes the picture. A 70% ceiling then allows £665,000, which leaves a £35,000 gap between the facility you need and the one on offer. You would have to fund that gap from your own money.
Minimum loan sizes
Minimum loan sizes also matter. Some lenders start at £500,000 and others at £1 million. Smaller schemes may therefore find fewer options and need a broker who knows which lenders will consider them.
What do lenders look at?
A lender taking over a half-built scheme carries more risk than one funding a finished building, so expect closer questions on these points:
- Build progress and cost to complete: the lender’s surveyor reports on work done and the budget still needed, and funds follow as progress is confirmed.
- Your contractor and programme: the lender wants to see the building contract, a realistic timetable and, if the original contractor has gone, a replacement.
- Planning and building control: planning conditions should be discharged where they need to be, and building control should be on track.
- Warranty: a new homes warranty, or a clear route to one, shows buyers’ lenders will accept the finished units.
- Sales evidence: agent reports, comparable sales and any reservations help support your GDV.
- Your track record and profit margin: a completed scheme or two and a healthy margin on cost make the lender more comfortable.
- Your exit: a sales plan, a refinance route or both, with a fallback if prices soften.
Who can borrow?
Development lenders commonly lend to a limited company or a special purpose vehicle (SPV). An SPV is a company set up to hold one project and keep its risk apart from your other businesses. Some lenders also lend to partnerships, limited liability partnerships (LLPs) and individuals, although the choice of lender narrows.
Some will consider first-time developers, but many want a record of completed schemes. If you are new to development, a stronger plan and an experienced professional team will help your case.
Finish and exit finance is unregulated by the FCA.
What does finish and exit finance cost?
Expect an arrangement fee, commonly 1% to 2% of the loan at the time of writing. You will also pay valuation, legal and monitoring surveyor fees, plus any broker fee. Some lenders add an exit fee of up to 1%, depending on the term. Because interest is usually rolled up, the balance grows through the term, and you repay it from sales or a refinance.
Interest rates change often. Pricing depends on the loan to GDV, build progress, your track record and the loan length, and a broker can check current deals for you. Lenders price the extra risk of an unfinished build, which means the new loan can cost more than the one it replaces.
Budget for the Building Safety Levy as well. GOV.UK states that from 1 October 2026, building control applications and initial notices for certain residential buildings may be subject to it. Check whether your scheme is affected.
What are the benefits and risks?
Keeping the project alive and fluid is the main benefit.
You can repay a lender that will not extend and avoid the default interest and enforcement costs that may follow a missed deadline. You also draw the funds needed to finish and gain time to sell at a sensible price instead of rushing.
Costs can exceed those of your original loan, terms are short, and a second round of slow sales may force a further extension or refinance. The lender holds security over the development and can sell it if the loan is not repaid. Some lenders also ask directors for personal guarantees, so read the terms closely and take legal advice.
What are the alternatives?
Finish and exit finance is one route out of a stalled scheme, and the five below are the main alternatives.
The right one depends on how far the build has progressed, how much equity you hold and whether buyers are already reserving units.
- Ask your existing lender for an extension. Some will agree, usually for a fee, but others will not.
- Sell part of the scheme early. Completed units that sell reduce the debt and the pressure on the rest.
- Sell the site or part-built scheme. A buyer may use a finish and exit loan to buy the site, with further funds released as the works progress.
- Bring in an equity partner or mezzanine finance. This fills a funding gap but costs more and adds another party to the deal.
- Use a short-term loan. A bridging loan can suit a short gap when the build is nearly done.
How long does it take, and what should you prepare?
Allow around a month where you can, because valuations, site visits and legal work all take time, and start before your current term ends. Some specialist lenders can complete in days, but a rush leaves little room if the valuation raises questions.
Lenders usually ask for:
- A redemption statement for your existing loan
- The build programme, cost to complete and any contractor agreements
- Planning and building control documents
- Your warranty or a plan to obtain one
- An appraisal and sales evidence
- A summary of your experience and recent schemes
- Company accounts and details of directors
Speak to an independent broker
If your scheme is running out of time, the sooner a specialist broker sees the numbers, the more options you are likely to have. Respect Mortgages cannot arrange or advise on loans but you can contact us, though, and we will introduce you to an independent broker experienced in development finance.
Frequently Asked Questions
It is a short-term loan for a development that has run over on time or cost. It repays the existing development lender, releases funds to complete the build and runs long enough for you to sell the units or refinance.
Development exit finance suits schemes that are complete or nearly complete, so lenders expect practical completion or close to it. Finish and exit finance accepts schemes that still need work. The lender therefore takes on construction risk and asks harder questions about the cost to complete.
It depends on the lender. Development exit lenders usually look for a scheme that is wind and watertight, with the roof on and the shell closed against the weather. Many want it close to complete as well. Finish and exit lenders take earlier stages, and each sets its own minimum, so ask before you commit to valuation fees. Expect questions on the cost to complete and on who will do the work.
Lenders usually cap total borrowing at around two thirds to 70% of GDV, including rolled-up interest and fees. Your figure also depends on build progress, the cost to complete and your track record. The loan must cover the existing debt as well as the work still to do.
You have three main options. You can sell at a lower price, ask for an extension or refinance onto a longer-term loan if you plan to keep the units. An extension usually brings a new fee and may need a fresh valuation. A refinance depends on the finished units valuing high enough to clear the loan, so approach your lender well before the deadline.
Sometimes. Some facilities pre-agree a release of equity once the scheme reaches practical completion, passes final building control and has a new homes warranty. Only some lenders offer it, so raise it at the start if the money is meant for your next project.
Ready to explore your options?
If you’re just about to start a new mortgage journey and could use the guiding hand of a professional, don’t hesitate to reach out to a reputable mortgage broker.
An independent mortgage broker can access over 100 lenders on your behalf. They will make the process smoother and more profitable than going it alone.
Keep reading, keep asking questions. The more you know, the better decisions you can make.
