image of builders looking at houses being constructed for website J&J Commercial Finance

What Is Small Property Development and What Are the Finance Options?

What is a small property development?

Buying a small plot of land and building 2-4 houses on the plot is known as small property development and this is becoming increasingly common with a current UK housing shortage and a solid demand for homes.

What does a broker need to know about your circumstances?

There are a range of situations that will affect the finance available to you. The kind of questions you will get asked by a broker will be to better understand your individual circumstances. They will want to know if you have:

-planning permission

-build plans

-estate agent valuation

-land purchase

-development cost

-exit strategy

This is a lot of information to ask for but the more information you can supply the better your financial broker will be able to help you secure the best finance for your project.

What are the sources of finance?

Traditionally, it was the high street banks that provided the funding to individuals and small businesses but nowadays there is something known as ‘three tier finance. What this means for you is that there are more sources of finance available to you making it more likely that you will be able to secure the finance needed to start and complete your project.

The three tiers of finance are ‘Tier 1’ which means the high street banks, ‘Tier 2’ which is newer banks known as challenger banks, and last of all ‘Tier 3’ which is peer-to-peer lending.

Your financial broker will find out in-depth about your individual circumstances using the information you supply them to be able to place you with the right lenders. They will also be able to help with understanding the LTV (loan to value) ratios available.

What paperwork should you obtain?

Before you go to meet your financial broker use your time to gather together all your relevant paperwork so that you can go prepared. There are a number of documents that are useful to bring to any meeting especially the first meeting with a financial broker, this is referred to as ‘fact finding’.

Try to collate data and information on:

– assets and liabilities;

– income and expenditure;

– the last 3 months bank statements;

– your outline planning permission (this can take up to 8 weeks to obtain) and;

– the retail value at the end of the project.

It is also important to have a firm idea of your plans at the end of the project, for example, do you plan to sell the properties and if so, what will they be worth? Or do you plan to rent out and if so, what will be the rental income?


If you have a small property development project that you would like to find out more about securing finance give J & J Commercial Finance a call on 07399 660 002 or send us a message. J & J Commercial Finance provides funding to businesses across the UK with access to over 300 lenders and private banks. For more information on businesses we have helped take a look at some of our past clients.