Development exit finance
Development Exit Finance Reading
Refinance away from your development facility on Reading and Berkshire schemes once practical completion is reached. Lower-cost short-term lending while units sell or let.
- Decisions in hours
- Completion in days
- £100k to £25m
- Berkshire specialists
Reading · Berkshire
Bridge to your next move.
About development exit
Short-term property finance across Reading and Berkshire.
Development exit finance is the bridge that takes over from a development facility once the scheme reaches practical completion. Development facilities are expensive while build is in progress because the lender carries construction risk. Once the building is finished and units are marketing or letting, that construction risk drops away and the facility becomes overpriced. Development exit refinances away to a cheaper monthly cost, gives the sales programme the breathing room it needs, and avoids the developer being pressured into accepting low offers because the dev facility is running out of time. Reading has an active small-developer scene focused on town-centre apartment schemes, Kennet Island and the Station Hill regeneration zone, and the brownfield infill plots around Cemetery Junction, Caversham Road and Forbury Park.
Development exit suits small and mid-sized developers with completed or near-complete schemes in Reading and across Berkshire. Typical schemes are 4 to 25 residential units, mixed-use blocks with retail at ground floor and flats above, or pure commercial conversions. The product fits developers whose dev facility term is running out, whose sales are not yet fully reserved, or whose existing lender will not extend on sensible terms. It does not suit schemes still under construction; that work belongs on a development facility. It also does not suit single-unit refurb projects, which sit under refurbishment bridging instead. Berkshire developers active in Bracknell town centre, Maidenhead waterside and the Newbury regeneration plots also routinely use the product.
A typical case
How a development exit case runs in Reading.
A developer reaches practical completion on a 14-unit residential scheme on a brownfield site at the edge of the Kennet Island regeneration zone, with views toward the Forbury and the Oracle riverside. Total gross development value £6.4 million. The development facility runs out in four months, with six units sold and eight still on the market. The dev facility costs 1.4% per month on the outstanding balance, with the lender pressing for further sales or a refinance. We package a development exit facility against the eight unsold units at 65% of their open market value, giving the developer 12 more months at 0.85% per month rather than 1.4%. Total facility £2.85 million. The lower monthly cost gives the developer time to hold out for asking-price offers rather than discount. Sales complete over the next nine months, the bridge redeems in tranches as each unit completes, and the developer walks away with the full profit margin intact. The same pattern recurs on schemes around Station Hill, the Caversham Road corridor, and the new build pockets near Tilehurst and the Calcot fringe.
Rates and fees
What this product costs.
Development exit prices between 0.75% and 1.0% per month for clean cases on residential or mixed-use schemes at practical completion. The product is materially cheaper than continuing on a development facility, which is the entire reason it exists. Cases at 60% to 65% loan to value against the gross development value, with the building certified at practical completion, sit at the lower end. Higher loan to value or schemes where some units are not fully finished sit higher. Arrangement fees run 1.5% to 2.0% of the loan. Valuation fees on multi-unit schemes typically £2,000 to £6,000. Legal fees both sides £3,000 to £8,000 depending on scheme complexity. No exit fee on most products. Partial redemption clauses allow each unit sale to redeem its proportionate share of the facility without penalty.
Loan size and term
LTV ceiling and how long you borrow for.
Development exit typically tops out at 70% of the gross development value or open market value of the unsold units, with most cases settling at 60% to 65%. Some lenders offer up to 75% on prime Reading schemes with strong sales momentum, particularly along the Kennet Island and Station Hill regeneration corridor where new-build comparable evidence is deep. Terms run 6 to 24 months, with most developers using 12 to 18 months to give the sales programme realistic time without overpaying.
Exit options
How the loan redeems.
Development exit has two main exit routes. First, sales of the individual units, with each completion redeeming the proportionate share of the facility. Most lenders allow per-unit partial redemption without penalty. Second, refinance of any unsold units onto a long-term BTL or commercial investment mortgage where the developer decides to retain stock. Many schemes combine both, with a portion of units sold and the remainder retained as a let portfolio. Lenders want a credible sales strategy at the offer stage, with realistic comparable evidence and an agent appointed. Reading new-build comparables in the Kennet Island, Forbury and Station Hill schemes are particularly well-evidenced because of the volume of recent transactions.
What makes a deal work
The clean cases.
Development exit runs cleanly when the scheme is genuinely at practical completion, when there is a sales agent appointed and marketing live, when realistic comparables support the per-unit values, and when the developer has a credible track record. Schemes in mainstream Reading postcodes with active estate agent presence and recent comparable sales underwrite quickly. Schemes with even partial pre-sales already exchanged carry strong momentum. A developer with three prior completed schemes already in Berkshire underwrites quickly on the borrower side, particularly where prior schemes have completed in Reading, Wokingham, Bracknell or the M4 commuter belt.
What doesn't
Where cases break.
Cases break where the scheme is not actually at practical completion (snagging still outstanding, building control sign-off not yet received), where the per-unit value assumptions are above local comparables, where the developer has no completed schemes in the area, or where the sales programme has been stalled for so long that the dev facility is already in distress. Cases also fail where the scheme has design or quality issues that affect saleability, regardless of how the developer values the units. EWS1 cladding issues on apartment schemes built between 2010 and 2019 also frequently block development exit refinance.
Our process
From first call to drawdown.
Step one, a triage call. Bring the scheme details, the practical completion certificate, the current sales status, the existing dev facility position, and the assumed per-unit values. Step two, we package the case and put it to three or four lenders with appetite for development exit on Reading and Thames Valley schemes. Indicative terms back inside 48 hours for a multi-unit case. Step three, valuation instructed by a surveyor familiar with multi-unit schemes, legals running in parallel. Step four, full credit at the lender, typically 7 to 10 working days for development exit cases. Step five, drawdown, with funds clearing the existing dev facility. Standard timeline from triage to drawdown is 21 to 28 working days. Development exit on commercial and investment schemes is not FCA-regulated. We are not directly authorised by the Financial Conduct Authority; we work with FCA-authorised partners for regulated lending.
Talk to us
Tell us about the deal.
A quick triage call, then indicative lender terms inside 24 hours. We work Reading and across Berkshire.
FAQs
Frequently asked questions on development exit
What counts as practical completion for development exit?
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Practical completion typically means the building is structurally complete, fitted out, certified by building control, and ready for occupation, with any outstanding snagging items captured on a defects list rather than blocking handover. Some lenders accept slightly earlier, where the building is fitted out and substantially complete but final certification is days away. We agree the exact PC trigger with the lender at the offer stage so there is no ambiguity at drawdown.
Can development exit fund a stalled scheme in Berkshire?
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Sometimes. Where a scheme is genuinely at practical completion but has stalled on sales because the original dev facility is running out and the developer is forced to discount, development exit can stabilise the situation by refinancing onto a cheaper monthly cost. Where the scheme has stalled because of quality, design or planning issues, development exit is not the answer; those issues need solving first.
How are per-unit sales handled on a development exit facility?
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Most development exit facilities include a partial redemption clause that releases each unit on sale, with the proportionate share of the facility redeemed from the sale proceeds and the remaining units held at a recalculated loan to value. There is normally no penalty on partial redemption, though some lenders apply a minimum-interest period of three or six months. We negotiate the partial redemption mechanism case by case to match the expected sales velocity.
Next step
Talk to a Reading bridging specialist about development exit.
Indicative terms in 24 hours. We work development exit cases across Reading and the wider Berkshire market on a same-day enquiry response.