Exit funding for completed apartment blocks

Criteria for a finished-scheme bridge

Development exit lenders are most comfortable once an apartment scheme has reached practical completion, because the construction risk that drove the development finance has been removed. They want sight of the completion certificate, building control sign-off, the structural warranty and the NHBC or equivalent cover on each unit, an open-market valuation of the finished block, and a credible plan to repay: a sales programme with realistic pricing and an absorption rate the local market supports. They will assess the property developer's experience, but they are underwriting a finished, saleable block of flats rather than years of trading, so a developer on an early scheme is fundable where the apartments are genuinely complete and the exit is sound. They look closely at the sales rate and the depth of demand for the unit mix, because the repayment comes from net sales across the block over the marketing period. We confirm and document the exit before the facility draws, so the bridge is repaid on schedule rather than rolled repeatedly.

How much sales-period funding you can raise

Residential development exit finance is sized against the gross development value of the completed block, indicatively up to 70 to 75 percent of value, which is often higher than the development loan being repaid because the apartments are now finished and valued on completion rather than on cost. That headroom can release capital above the senior debt for the developer to deploy on the next site. The facility runs for the sales period, typically 12 to 18 months, with interest usually retained or rolled up so the net day-one advance is the gross loan less the retained interest and fees, and so monthly cash flow is not strained while the units are still selling. As apartments sell, each net sale makes a partial repayment and the lender releases that unit from its charge, so the facility winds down across the block. We model the loan against GDV, the capital it releases and the all-in cost over the expected sales period before approaching lenders. All bands are illustrative, vary by lender and scheme, are subject to principal sign-off, and are not an offer.

What an apartment block exit loan costs

The point of moving onto a development exit bridge is the saving: refinancing off development finance priced for construction risk onto short-term property finance priced for a finished block usually cuts the monthly cost, while removing the maturity pressure that forces a discounted bulk sale. Indicative pricing sits around 0.65 to 0.95 percent per month, illustrative only and not an offer, with interest usually retained or rolled up rather than serviced. On top of the rate, expect a lender arrangement fee of indicatively around 1 to 2 percent, a valuation, legal costs for both sides, and sometimes an exit fee. The largest cost lever is time: a bridge held for four months costs a fraction of one held for eighteen, so a realistic sales plan and a clean exit matter more than chasing the lowest headline rate per month. We disclose our broker fee in writing, quote the all-in cost over the expected term, and never claim an exclusive panel or fabricate lender numbers. The figures are indicative and not an offer of finance.

A developer exit loan against the development facility

A developer exit loan and the development finance it replaces do different jobs at different points in the scheme. Development finance is the right debt while the block is being built, because it funds construction and is priced for the risk that the build runs over or fails to complete. Once practical completion is reached that risk is gone, so keeping the asset on development finance means paying construction-risk pricing and extension fees on a facility that may be past its term, which is exactly why a development exit bridge lowers the cost. Where the developer intends to sell the whole block, the exit bridge holds the asset through the sales period and is repaid on net sales. Where some apartments are retained and let, the route is often a development exit bridge first, then a refinance onto buy-to-let or investment term debt, or a residual stock loan against the last unsold units. We map the route so the block is on the right debt for what it is about to do.