What is development exit finance?

Development exit finance is short-term bridging finance secured against a development scheme that is near or approaching practical completion. It is typically used by developers who need capital to complete final works, are refinancing an existing development facility, or need time to sell or refinance before a long-term facility can be arranged. Unlike traditional development finance, it does not require staged drawdowns — it is drawn in a single advance against the value already created in the scheme.

Can I get development exit finance without a valuation?

Yes, in suitable cases. AF Credit can consider no-valuation underwriting for development exit finance where the security position is sufficiently conservative, supporting evidence is available — such as planning documentation, build progress photographs, cost-to-complete analysis and comparable sales evidence — and the LTV is low enough to justify the approach. In this Manchester case, a £325,000 facility was provided at 35% LTV against a £3.9m GDV with no formal valuation required.

Can I get development exit finance without a build warranty?

Mainstream lenders typically require a build warranty such as an NHBC Buildmark or equivalent to be in place before drawdown. AF Credit can consider cases where a build warranty is not yet in place, provided a retrospective warranty can be implemented following practical completion. In this Manchester case, the developer did not have a warranty at the point of application. Rather than treating this as an automatic decline, AF Credit identified that a retrospective warranty could be put in place after the works were completed.

What LTV does AF Credit offer on development exit finance?

AF Credit considers development exit finance on a case-by-case basis, with LTV typically assessed against the completed Gross Development Value rather than the current build-stage value. In this Manchester case, the facility was structured at 35% LTV against the £3.9m GDV — a highly conservative position that supported the no-valuation and no-warranty approach taken.

Development Exit Finance — 21-Unit Conversion, Manchester

⚠️ The Challenge

Although planning permission was in place, structural works were complete and only second fix remained, several lenders declined because the development was too advanced, no warranty had been issued, and most could not accommodate late-stage development finance.

💡 Our Solution

No-valuation underwriting supported by planning docs, build progress and comparables. Retrospective warranty solution agreed. Interest fully retained. First legal charge. 18-month term to allow orderly MUFB refinance.

✅ The Outcome

£325,000 net facility drawn. Developer completed second fix and final works. 21-unit scheme reached practical completion and refinanced onto a long-term Multi-Unit Freehold Block facility.

Background

The Situation

An experienced property developer required additional capital to complete the second fix and final internal works on a 21-unit commercial-to-residential conversion in Manchester.

The property had originally been acquired for approximately £700,000 without finance and was owned outright. Planning permission had subsequently been secured to convert the building into 21 residential apartments, with the majority of construction works already completed. Structural works were finished. First fix plumbing and electrical installations were complete. Only second fix and finishing works remained before practical completion.

The completed scheme carried an estimated Gross Development Value of approximately £3.9 million. The developer required £325,000 to complete the final works before refinancing onto a long-term Multi-Unit Freehold Block facility.

Despite the conservative leverage and strong security position, multiple lenders declined the transaction.

Why other lenders declined

The development was considered too advanced for traditional development finance
No structural warranty had been issued at drawdown
Funding was needed only for the final phase of works
Most lenders could not accommodate late-stage development finance

Context

Why Late-Stage Development Finance Is Difficult to Obtain

Many lenders are happy funding developments from the beginning. Far fewer will finance a project that is already nearing completion.

This developer had already invested substantial capital into the scheme, completed all structural works, installed first fix plumbing and electrics, and significantly increased the value of the property. Only the second fix and finishing works remained before practical completion.

Despite the strength of the security, several lenders declined because their lending criteria simply did not accommodate projects at this stage. The issue was not the quality of the asset — it was the underwriting process.

🏗️

AF Credit assessed the fundamentals — not the process.

Instead of asking whether the case fitted a standard lending policy, AF Credit assessed the overall risk. Planning permission had been implemented, structural works were complete, the building was owned outright, the estimated GDV was £3.9 million, and the requested loan represented only 35% loan-to-value. With the majority of development risk already removed, this represented a significantly lower risk than many early-stage development loans.

Structuring the Deal

How AF Credit Structured the Facility

No valuation required

Because leverage was exceptionally conservative and comprehensive supporting information was available, AF Credit completed the transaction without requiring a full valuation. Underwriting relied on planning documentation, development progress, comparable sales, cost-to-complete analysis and exit strategy assessment. Removing the valuation reduced both cost and completion time.

Retrospective build warranty

Several lenders automatically declined because a structural warranty was not yet in place. Rather than treating this as a deal breaker, AF Credit identified a retrospective warranty solution that could be implemented after completion of the remaining works — avoiding unnecessary delays while maintaining an appropriate level of lender protection.

Retained interest

Interest was retained for the full loan term, meaning the developer had no monthly interest payments during construction. All available capital could be directed towards completing the apartments.

18-month exit strategy

The facility provided sufficient time to finish second fix works, obtain practical completion, complete certification, let the apartments if required, and refinance onto a Multi-Unit Freehold Block facility. The exit strategy was realistic, well evidenced and commercially robust.

Deal Structure

The Numbers

Item	Detail
Property Type	Commercial-to-Residential Conversion
Location	Manchester
Units	21 Apartments
Original Purchase Price	~£700,000 (unencumbered)
Gross Development Value (GDV)	£3,900,000
Net Loan	£325,000
LTV (against GDV)	35%
Monthly Interest Rate	0.99%
Term	18 Months
Interest	Fully Retained
Security	First Legal Charge
Valuation	Not Required
Build Warranty	Retrospective Warranty Permitted
Build Stage at Drawdown	Second Fix
Exit Strategy	MUFB Refinance

Analysis

Why This Case Was Different

Many lenders follow a process. AF Credit underwrites risk. Although the project sat outside conventional development finance criteria, the actual credit position was exceptionally strong.
First legal charge on an unencumbered property. The building was owned outright with no existing charges, giving AF Credit a clean first charge position throughout.
Conservative 35% LTV. At 35% against a £3.9m GDV, the lender had substantial equity protection — significantly more headroom than most early-stage development loans.
Planning implemented and most construction risk removed. Structural works were complete. The remaining second fix and finishing works carried materially less risk than funding a project from day one.
Credible refinance exit. A 21-unit residential block in Manchester with a demonstrable rental profile provides a straightforward route to Multi-Unit Freehold Block refinancing. The exit strategy was well-evidenced and commercially robust.
Retrospective warranty resolved the warranty gap. Rather than an automatic decline, AF Credit identified a practical post-completion solution that maintained lender protection without blocking the transaction.

Products Used in This Case

How This Deal Was Financed

This transaction was structured using AF Credit's development exit and no-valuation bridging capability — specifically designed for developers requiring capital to complete a scheme after the majority of construction is already finished.

Primary product

No Valuation Bridging Loans

AVM or desktop underwriting — no physical survey, no upfront cost, faster completion.

Commercial Bridging Loans

Offices, retail, mixed-use and commercial-to-residential conversions across England and Wales.

Refurbishment Finance

Light and heavy refurbishment, including late-stage funding and staged drawdown facilities.

Related Case Study

See Another Deal

Need funding to finish a
property development?

Many developers assume that if construction has already started — or is almost complete — they have missed the opportunity to obtain development finance. In reality, late-stage developments can often represent lower risk than projects at the beginning of construction.

If your lender has declined because your development is too far advanced, you need second fix funding, you require finance to reach practical completion, you don't yet have a structural warranty, or you need a fast development exit — AF Credit may be able to help.

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Disclaimer: Case study details have been anonymised to protect client confidentiality. All lending is subject to underwriting and credit approval is not guaranteed. Any property used as security may be repossessed if you do not repay your loan within the agreed term. AF Credit acts solely as a lender and does not provide financial advice.

Multiple Lenders Declined.AF Credit Completed.