Guide 03
What to Expect on
Your First Development
A realistic picture of what your first development will look like — the timeline, the team, the numbers, and what nobody tells you.
Realistic timelines
The biggest shock for first-time developers is how long everything takes. Not the build itself — but everything around it. Here's a realistic breakdown:
Finding the right site
Searching, appraising, negotiating. Most first-timers look at 20+ sites before committing to one.
Securing finance
From first call to drawdown. Can be faster for straightforward deals, longer for complex structures.
Construction
Depending on scheme size. Small conversions can be 6 months. A 10-unit new-build typically takes 14–18 months.
Sales / exit
Selling completed units. Depends on market conditions, pricing, and sales strategy. Start marketing before completion.
A worked example: 6 houses, commuter belt
Numbers simplified for illustration. This is the kind of appraisal a first-time developer might bring to us — and what it looks like once properly structured.
Development Costs
Funding Structure
Month-by-month: from search to exit
Months 1–4: Site search & appraisal
Identify site, run comparable analysis, produce an initial appraisal. Negotiate heads of terms. Instruct solicitor.
Months 4–6: Finance & legal
Finance application submitted with full appraisal and business plan. Legal due diligence runs in parallel. Facility agreed and drawn down at exchange/completion.
Months 6–20: Construction
Build progresses in stages. Monthly drawdowns certified by monitoring surveyor. Contractor paid in arrears — keep a working capital buffer for the lag.
Months 16–22: Marketing & sales
Sales agent appointed, show home open. Forward sales can start before completion. Early reservations reduce exit risk and may improve lender terms on future deals.
Month 22–26: Exit & profit realised
Final units sell, loan repaid (capital + rolled-up interest + fees). Net profit lands. Your track record is established.
Real-World Example
Kent Houses — 4 Detached, First-Time Developer
£1.1m facility, 65% LTC, 13-month build. Two high-street banks had already declined. We got it funded — and the developer achieved 20% profit on cost.
Your professional team
Property development is a team sport. Here are the key players you'll need and what they do:
Architect
Designs the scheme, prepares planning drawings, and may manage building regulations approval. Essential from day one if you need planning.
Typical cost: 5–8% of build cost
Quantity Surveyor (QS)
Prepares detailed cost plans, manages the budget during construction, and certifies drawdown amounts. Your financial guardian on site.
Typical cost: 1–3% of build cost
Main Contractor
Builds your scheme. Can be a design-and-build contract or construction-only. The most important relationship in the project.
Get 3 competitive tenders minimum
Solicitor
Handles site acquisition, reviews the loan facility agreement, manages security registration. Choose one experienced in development — not just conveyancing.
Typical cost: £3k–£15k depending on complexity
Selling Agent
Markets and sells your completed units. Appoint early — their valuation letters help secure better finance terms, and early marketing captures forward demand.
Typical cost: 1–2% of sales price
Us — Your Finance Broker
We structure and secure the optimal funding. We write the appraisal, select lenders, negotiate terms, and manage the process from enquiry to exit.
Fee: 1–2% of facility, payable on completion
How build monitoring works
Unlike a mortgage, development finance doesn't release all the money at once. The lender appoints a monitoring surveyor who visits the site at each drawdown stage to verify:
- ✓ Work claimed has actually been completed to an acceptable standard
- ✓ The project is on programme (or any delays are understood and managed)
- ✓ Remaining costs are sufficient to complete within the facility amount
- ✓ There are no defects or issues that could affect the end value
This usually takes 3–7 working days per drawdown. Plan your cashflow around this — you'll typically be paying your contractor in arrears, claiming back through the drawdown process.
Managing cash flow
Cash flow management is one of the biggest challenges for first-time developers. Here's what you need to know:
Equity goes in first
Most lenders require your equity contribution before they release any funds. You fund the deposit and early costs before the facility activates.
Drawdown lag
There's always a gap between spending money on site and getting it back through the drawdown. Keep a working capital buffer — typically £20k–£50k+ depending on scheme size.
Interest rolls up
You won't pay interest monthly — it accrues and is repaid at exit. But make sure your facility includes enough headroom for the rolled-up interest.
Sales cashflow
When units sell, the sale proceeds go to the lender first (to reduce the loan), then your equity is returned, then profit. Don't spend the profit before it's in your bank.
Common questions from first-time developers
Can a first-time developer get development finance?
Yes — specialist lenders on our panel actively fund first-time developers, provided the application is properly structured. What lenders want to see is competence, not just a track record: a credible professional team (experienced QS and contractor), a conservative and well-evidenced appraisal, and adequate equity in the deal. A developer with 15+ years of construction management experience, for example, can use that as equivalent track record. The key is how the application is packaged and presented.
How much deposit do I need for development finance?
Most development finance lenders require you to contribute 30–40% of total project costs, though this varies by deal. Expressed as loan-to-cost (LTC), most first-time developer deals land at 60–70% LTC — meaning you bring 30–40%. Some lenders allow equity in land you already own to count as part of your contribution. Mezzanine finance can bridge part of the gap if you have strong equity but need higher overall gearing.
What happens if the build overruns on a first development?
Most development finance facilities include a contingency allowance (typically 10–15% of build cost) specifically for overruns. If you need more time, most lenders will agree a facility extension — usually for an additional 1–3 months at a fee. The key is to notify your lender and broker early: extensions agreed proactively are straightforward; extensions requested at the last minute cost more and create stress. Keep the monitoring surveyor informed throughout and flag issues before they become emergencies.
What nobody tells you
- ◆ It will take longer than you think. Add 3 months to whatever timeline you're planning.
- ◆ You will need to make decisions quickly. Delayed decisions cost money on a development.
- ◆ Something will go wrong on site. That's normal. Budget and plan for it.
- ◆ Your relationship with your contractor is everything. Invest time in it before a single brick is laid.
- ◆ Most first-time developers are surprised by how collaborative lenders can be — if you communicate early and honestly.
- ◆ The profit at the end is worth it — but it's earned, not given.
- ◆ Your second development will be 10x smoother. The learning curve is steep but short.
Next Up — Guide 04
Pre-Application Checklist
Everything you need to have ready before approaching a lender. The preparation that separates funded projects from rejected ones.
Read Guide 04 →