How Development Finance Works for Harrow Developers

Development finance in Harrow typically ranges from £500,000 to £25 million, with current average property values of £440 per square foot. Here's how it works and what Harrow developers need to know.

What Is Development Finance?

Development finance is specialist funding for property development projects — from ground-up new builds to heavy refurbishment and conversion schemes. Unlike standard mortgages, development finance uses staged drawdowns: funds are released in tranches as construction milestones are achieved, verified by an independent quantity surveyor.

For Harrow developers, the key metrics lenders assess are:

Types of Development Finance Available in Harrow

Senior Development Loans (from 6.5% p.a.)

The primary funding facility, secured by first charge. Covers 55-65% of GDV with staged drawdowns against QS valuations. Interest is retained (rolled up), so there are no monthly payments during construction. With Harrow's average development timeline of 15 months, total interest costs are predictable and manageable.

Stretch Senior (from 8% p.a.)

A single facility providing 65-75% of GDV — higher leverage than standard senior debt, but simpler than combining separate senior and mezzanine facilities. Ideal for experienced Harrow developers who want to minimise equity deployment.

Mezzanine Finance (from 12% p.a.)

Second-charge top-up funding that bridges the gap between senior debt and total costs. Combined with senior debt, you can achieve up to 90% loan-to-cost. The intercreditor agreement between senior and mezzanine lenders is managed by us.

JV Equity (Profit Share)

For expert developers, JV equity partnerships provide up to 100% of project costs in exchange for a share of profits (typically 50/50 to 60/40). No personal guarantees required. Minimum GDV usually £5M+.

Development Exit Finance (from 0.55% p.m.)

Replaces your development loan at practical completion, giving you time to sell completed units at full market value. With Harrow's 4.1% average rental yield, you also have the option to refinance onto long-term buy-to-let mortgages.

How Harrow's Market Affects Your Application

Harrow's planning approval rate of 74% (Harrow Council Planning Committee Reports 2024/25) is a key factor. Lenders will want to see strong planning advice and ideally a pre-application consultation with the local authority before committing terms.

Population growth of 1.9% (ONS Mid-Year Population Estimates 2024) creates ongoing housing demand, which strengthens your application by demonstrating end-buyer/tenant demand.

Getting Started

The process from enquiry to first drawdown typically takes 3-6 weeks:

1. Submit your enquiry — Tell us about your Harrow project 2. Indicative terms — We issue terms within 24-48 hours 3. Valuation and legal — RICS valuation and solicitor instruction 4. Drawdown — First tranche released on completion

Get a free quote or call us to discuss your Harrow development project.

Arranged by Lenzie Consulting Ltd. Part of the Construction Capital network.

Related Articles