Bridging finance for planning gain

Why bridging suits planning-led deals now

Bridging finance has moved centre stage for planning gain because it delivers speed, flexibility and deal certainty at the points that matter most. In the UK, quarterly completions set fresh records in 2024 and total originations jumped year on year, with the market projected to grow further in 2025. That momentum signals deeper lender appetite and more available product for credible planning-led strategies. For buyers facing tight auction timelines or competitive sealed bids, being able to complete in days rather than weeks is often decisive.

Bridging lenders typically underwrite against asset value and a clearly evidenced exit rather than personal income alone. For planning gain this is crucial. The future uplift created by consent is the engine of the business case, and lenders recognise that reality by focusing on security quality, the route to permission and the repayment plan. Average loan-to-value sits around the mid-50s across the market, with some providers lending up to 70-75% where assets are strong and exits are robust. Terms commonly span 12-18 months, giving time to secure permission and move into development finance or a sale.

Pricing remains above mainstream mortgages but competition among 40-plus UK bridging providers is supporting sharper margins and fees in 2025 for stronger profiles. At the same time, lenders are refining affordability checks and exit verification for any regulated bridging, so mixed-use or consumer-facing scenarios may experience additional scrutiny. Structures are also more adaptable than they were a few years ago. Staged drawdowns, retained or rolled interest and milestone-linked covenants can better align cash flow with the planning journey, helping smaller promoters conserve equity during the most uncertain phase.

The result is a pragmatic tool: rapid access to capital to acquire or control land, flexibility to tailor cash flows to planning milestones and a predictable exit via refinance or sale. Used carefully, bridging can turn a narrow window of opportunity into a bankable outcome.

Speed, asset-led underwriting and credible exits are the pillars of successful planning-gain bridging.

Who is it for?

Bridging for planning gain suits UK developers, land promoters and investors who need to act quickly to secure a site, tidy ownership or progress value-enhancing permissions. It also fits professional landlords moving into conversion or change-of-use projects where timing and certainty are decisive. Borrowers with complex incomes or recent credit events can still be viable applicants when the security is strong and the exit is credible. For mixed scenarios involving a primary residence, expect additional regulated-lending checks and a slightly slower path to completion. If you are early in your development journey, a broker can help package the case so lenders understand the planning rationale and proposed exit.

Funding routes at a glance

1. Classic bridging loan to acquire land pending planning, then sell post-permission.

2. Bridge-to-development: acquire with a bridge, then refinance into development finance.

3. Bridge with staged drawdowns to fund planning costs during the permission process.

4. Bridge for auction purchases with tight completion deadlines.

5. Chain-break bridge to secure a site while equity is released from another sale.

6. Re-bridge to extend term if permissions are close but not yet secured.

Costs, impact and key risks

Can you qualify?

Eligibility hinges on the asset, the plan and a realistic way to repay. Lenders will want clean title, a professional valuation and a clear story about why the site is suitable for planning uplift. If you are targeting change of use or conversion, include an outline showing how energy and EPC standards will be met, as some lenders are tightening criteria for low-rated stock. Typical maximum LTVs for planning-led acquisitions sit below mainstream development finance thresholds, although 70-75% is achievable where the security, sponsor experience and exit certainty are strong.

You will be expected to present a credible timetable to permission, supporting reports and evidence of likely demand for the end use. Exits usually involve a sale after consent or refinancing into development finance. If your exit relies on a mortgage, affordability and stress tests still matter at the refinance stage. For mixed or homeowner scenarios, expect enhanced affordability checks and documentation because regulation is stricter. Kandoo can help position your case with lenders that prioritise asset value and exit quality, which can be advantageous for borrowers with complex income or recent credit blips.

From enquiry to completion

1. Share site details, timeline and target planning strategy.

2. Receive indicative terms based on value and exit strength.

3. Instruct valuation, legals and initial due diligence checks.

4. Agree structure: LTV, term, fees, staged draws if needed.

5. Lender completes underwriting and confirms formal offer.

6. Sign documents, funds released to meet completion date.

7. Progress planning, manage conditions and milestone reporting.

8. Execute exit: refinance to development or sell post-permission.

Upsides and trade-offs

Before you commit

Build a realistic timeline that includes contingencies for consultations, committee cycles and possible appeals. If the planning case depends on design changes or additional surveys, ensure the budget allows for these before you commit to the bridge. Model downside scenarios such as a three-month delay, a reduced scheme or a slower sales market and check how this affects interest accrual, covenants and exit feasibility. Pay particular attention to EPC and compliance requirements if conversion or refurbishment is involved, because unclear retrofit plans can increase pricing or lead to refusals. Finally, interrogate the exit route. If refinancing is likely, stress-test the debt coverage under plausible interest rates and lender appetite at the time of refinance.

Alternative paths

1. Option agreement or conditional contract to control the site without immediate purchase.

2. Joint venture equity with a landowner or investor to reduce leverage.

3. Mezzanine or second charge finance to supplement equity with caution.

4. Vendor financing or deferred consideration to bridge affordability gaps.

5. Development finance from the outset where planning is advanced.

FAQs

Q: How fast can a bridge complete for a planning-led purchase? A: With a well-packaged case, some lenders can complete in a matter of days. Most transactions complete within a few weeks, depending on valuation and legals.

Q: What LTV can I expect on a planning acquisition? A: Market averages sit around the mid-50s, though up to 70-75% is possible where the asset is strong and the exit is well evidenced.

Q: Do lenders consider projected value after planning permission? A: They primarily underwrite current value and the credibility of the route to permission and exit. The uplift informs exit strength rather than today’s loan amount.

Q: Is rolled or retained interest available? A: Yes. Many structures allow retained or rolled interest and staged drawdowns, aligning costs with planning milestones and reducing early cash outlay.

Q: What is a typical exit strategy? A: Common exits include selling the site after consent or refinancing into development finance. Lenders will expect clear evidence that one of these is deliverable within term.

Q: How do regulations affect my application? A: Purely commercial bridges are generally quicker. If the loan is regulated, expect tighter affordability checks, more documentation and potentially longer timelines.

How Kandoo helps

Kandoo is a UK-based retail finance broker with access to a panel of specialist bridging lenders. We assess your site, planning timetable and exit, then align you with lenders that prioritise speed, asset strength and realistic outcomes. Expect clear term sheets, fee transparency and structures that match your cash flow. Speak with us to benchmark pricing and secure competitive terms.

Important information

This article is for information only and is not advice. Bridging loans are secured and your property may be at risk if you do not keep up repayments. Terms, pricing and eligibility vary by lender and individual circumstances.