Development Finance in Camden
Fund your Camden property development with competitive senior debt facilities. Access 100+ specialist lenders, rates from 0.65% per month, and expert guidance from application through to completion and exit.
What Is Development Finance?
Development finance is a specialist form of property lending designed to fund the construction, conversion, or substantial refurbishment of residential and commercial property. Unlike a conventional mortgage that provides a single lump sum against an existing asset, development finance is structured around the projected value of a completed scheme and released in stages as construction progresses. This makes it the appropriate funding vehicle for any project where significant building works are required before the property reaches its full market value.
For developers working in Camden, development finance unlocks the ability to pursue projects that would otherwise require prohibitive levels of personal capital. The borough presents a particularly compelling landscape for property development: average residential values range from approximately £580,000 in emerging areas like Gospel Oak to well over £1.5 million in established prime locations such as Hampstead. This breadth of values means that development finance can be structured to support everything from a modest conversion scheme in Kentish Town to a substantial new-build project along the Kings Cross regeneration corridor.
At Camden Development Finance, we act as specialist brokers with access to a panel of over 100 development finance lenders. Our role is to understand the specific requirements of your Camden project, structure the funding to optimise your capital efficiency, and secure the most competitive terms available in the market. We understand the local planning environment, the conservation area constraints that affect much of the borough, and the market dynamics that underpin lender confidence in Camden property.
Types of Development Finance
Understanding the different layers of development funding allows you to structure your Camden project for maximum capital efficiency and returns.
Senior Debt
First charge lending
Senior debt is the primary layer of development finance and sits as a first charge against the property. This is the most cost-effective form of development lending because the lender has priority over all other creditors in the event of default. For Camden projects, senior debt typically funds up to 65-70% of total project costs at rates from 0.65% per month.
Senior lenders assess your scheme based on both the cost of the project (Loan-to-Cost) and the projected end value (Loan-to-GDV). The lower of these two metrics determines the maximum facility. In Camden, where end values are generally strong relative to build costs, the LTC ratio is usually the binding constraint, meaning you can often access the full 70% of costs.
Stretched Senior
Enhanced first charge
Stretched senior finance is an enhanced form of senior debt where a single lender provides a higher LTC ratio than standard senior terms — typically up to 80-85% of project costs. This eliminates the need for a separate mezzanine lender and the associated intercreditor complexity, while still sitting as a first charge.
The trade-off is a higher blended rate compared to standard senior debt, reflecting the additional risk the lender takes on by funding a greater proportion of costs. Stretched senior is particularly suitable for experienced Camden developers with a strong track record who want a simpler capital structure and faster execution, as there is only one lender to negotiate with rather than two.
Mezzanine Finance
Second charge lending
Mezzanine finance sits behind the senior debt as a second charge, filling the gap between what the senior lender provides (typically 60-70% LTC) and the developer's available equity. Combined with senior debt, mezzanine can take total leverage up to 90% of project costs, reducing your cash equity requirement to just 10%.
Mezzanine rates are higher than senior debt (typically 1.0-1.5% per month) because the second charge position carries more risk. However, the net effect on your overall returns can be significantly positive because the reduced equity requirement means your capital is working harder. For Camden schemes with strong GDV projections, mezzanine can transform project economics.
Development Equity
Profit share funding
Development equity involves an investor providing the equity portion of the capital stack in exchange for a share of the development profit. This can fund up to 100% of project costs when combined with senior debt, meaning the developer contributes no cash equity of their own. Instead, the developer contributes their expertise, time, and project management skills.
Equity investors typically require a profit share of 20-50%, depending on the project risk profile and the developer's track record. While this reduces your absolute profit on a single scheme, it allows you to pursue projects that would otherwise be impossible or to run multiple projects simultaneously by preserving your personal capital across a portfolio of Camden developments.
The Development Finance Capital Stack
Understanding how different layers of funding combine is essential for optimising your capital structure. Here is how a typical Camden development project might be funded.
Example: £2,000,000 total project cost with £3,200,000 GDV
Developer Equity
Your cash contribution
Mezzanine Finance
Second charge, 1.0-1.5% pm
Senior Debt
First charge, from 0.65% pm
Total Project Cost
£2,000,000
GDV
£3,200,000
Developer Profit
£1,200,000
This capital stack illustration shows how combining senior debt with mezzanine finance can reduce your equity requirement from 30% (£600,000) to just 10% (£200,000), freeing capital for additional projects.
How Development Finance Works in Camden
From initial enquiry to final exit, here is the complete development finance journey for your Camden property project.
Application
Submit your project details including site address, planning status, build costs, and projected GDV. We prepare a comprehensive funding package and present it to the most suitable lenders on our panel. Indicative terms are typically received within 24 hours.
Valuation
Once you accept indicative terms, the lender instructs a RICS-accredited valuer to assess the site's current market value and the projected Gross Development Value upon completion. For Camden projects, valuers with local expertise are essential given the borough's diverse micro-markets.
Drawdown
The initial drawdown covers land acquisition (if applicable) and early-stage mobilisation costs. Subsequent tranches are released against a pre-agreed drawdown schedule, with each release certified by the lender's monitoring surveyor following a site inspection.
Monitoring
Throughout the build programme, a monitoring quantity surveyor visits the site at regular intervals to verify that construction is progressing on time, to budget, and to the required quality standard. This protects both the lender and the developer by identifying any issues early.
Exit
Upon practical completion, the loan is repaid through your chosen exit strategy — typically the sale of completed units or refinancing onto long-term mortgage products. Camden's strong buyer demand and rental yields make both exit routes highly viable across the borough.
Development Finance Key Parameters
The headline numbers for development finance on Camden property projects. Actual terms depend on scheme specifics and your development experience.
Loan-to-Cost
Up to 70%
Of total project costs including land, build, and professional fees
Loan-to-GDV
Up to 65%
Of the projected Gross Development Value of the completed scheme
Interest Rates
From 0.65% pm
Monthly interest, typically rolled up and paid on redemption of the loan
Loan Terms
6-36 months
Matched to your build programme with extensions available if needed
What Camden Projects Do We Fund?
Camden's property landscape presents diverse development opportunities, and our lender panel can fund the full spectrum. Whether you are converting a former office building in Bloomsbury under permitted development rights, building new homes as part of the continuing Kings Cross transformation, or undertaking a sensitive refurbishment of a listed building in Hampstead, we structure the funding to match the specific requirements of your project.
Camden's conservation areas, which cover significant portions of the borough, can present additional costs and complexities. We work with lenders who understand that projects in conservation areas may have longer planning timescales, higher build specifications, and more demanding design requirements. These factors are reflected in realistic project appraisals that give lenders confidence in the scheme's deliverability.
Ground-Up New Build
Residential and mixed-use new build developments, from small infill sites to larger schemes of 50+ units. Popular in the Swiss Cottage corridor and Kings Cross fringe areas.
Office-to-Residential Conversions
Converting commercial buildings to residential use under permitted development rights or full planning. Particularly active in Bloomsbury, Holborn, and around Euston.
Period Property Refurbishment
Heavy refurbishment of Victorian and Georgian properties, including conversion of single dwellings into multiple units. Common in Hampstead, Belsize Park, and Kentish Town.
Mixed-Use Developments
Schemes combining ground-floor commercial space with upper-floor residential units. Well suited to high streets in Camden Town, Kentish Town, and Chalk Farm.
Basement Developments
Excavation and construction of basement levels to create additional living space or self-contained units. Subject to Camden's specific basement development policies.
Commercial Developments
Purpose-built commercial schemes including office, retail, and hospitality developments. Funded on projected commercial values and rental income.
Eligibility Criteria for Development Finance
While each lender has specific requirements, here are the general criteria that most development finance providers look for when assessing a Camden project.
Developer Requirements
- Development experience preferred (but first-timers considered)
- Net worth typically equal to or exceeding the loan amount
- Clean credit history (adverse credit considered by some lenders)
- Demonstrable ability to fund equity contribution
- Experienced professional team (contractor, architect, QS)
- UK-based SPV or limited company (personal guarantees required)
Project Requirements
- Planning permission granted or permitted development confirmed
- Detailed cost schedule from a reputable contractor
- Realistic build programme with clear milestones
- Professional valuation supporting the projected GDV
- Minimum project size typically £250,000+
- Credible exit strategy (sale or refinance)
Development Finance vs Bridging vs Mezzanine
Choosing the right finance product depends on your project type, timeline, and capital requirements. Here is how the three main property development finance products compare.
| Feature | Development Finance | Bridging Finance | Mezzanine Finance |
|---|---|---|---|
| Purpose | Construction & refurbishment | Acquisition & light refurb | Top-up to senior debt |
| Max Leverage | 70% LTC / 65% GDV | 75% LTV | 90% combined LTC |
| Rates From | 0.65% pm | 0.55% pm | 1.0% pm |
| Typical Term | 6-36 months | 1-18 months | 6-24 months |
| Drawdown | Staged against QS certification | Single lump sum | Aligned with senior drawdowns |
| Completion Speed | 2-6 weeks | 5-10 working days | 3-6 weeks |
| Charge Position | First charge | First charge | Second charge |
| Monitoring | QS inspections required | Not typically required | Aligned with senior facility |
| Best For | New builds, heavy refurbs, conversions | Auction buys, chain breaks, BTL refurbs | Reducing equity requirement |
Camden Development Finance Case Studies
Real projects we have funded across Camden, demonstrating the range of developments and funding structures we arrange.
Kings Cross Residential Conversion
Kings Cross, NW1
A former office building near King's Cross Station converted into 12 high-specification residential apartments under permitted development rights. The development capitalised on the area's world-class transport links and the Kings Cross regeneration.
Camden Town Mixed-Use Scheme
Camden Town, NW1
A ground-up mixed-use development comprising 8 residential units above ground-floor commercial space. Located within walking distance of Camden Lock Market, the scheme required sensitive design to complement the conservation area setting.
Hampstead Period Property Refurbishment
Hampstead, NW3
Complete refurbishment of a Grade II listed Victorian property in the heart of Hampstead, creating 4 luxury apartments. The project required careful coordination with Camden's conservation team and Heritage England.
Development Finance in the Context of Camden
Camden occupies a unique position in London's property development landscape. As an inner London borough stretching from the commercial core around Holborn and Bloomsbury in the south to the leafy residential streets of Hampstead and Highgate in the north, it offers an unusually diverse range of development opportunities within a single local authority area. This diversity is reflected in the wide range of development finance structures we arrange for clients working across the borough.
The Kings Cross regeneration — one of the largest urban redevelopment projects in Europe — has fundamentally transformed the southern part of the borough and continues to create opportunities for developers on adjacent sites. The area around Kings Cross and St Pancras now commands premium values, with new-build apartments regularly achieving £1,000 per square foot and above. Development finance for schemes in this area benefits from strong lender appetite driven by the area's established track record of successful delivery and the world-class infrastructure, including the Eurostar terminal and six Underground lines.
Moving north through Camden Town and Kentish Town, the development landscape shifts towards conversions and smaller infill schemes. Camden's extensive network of conservation areas — there are over 40 across the borough — means that development in many locations must be sensitive to the existing architectural character. This can add cost and complexity to projects, but it also underpins property values by preventing the kind of inappropriate development that can erode neighbourhood character. Our experience in structuring finance for conservation area projects means we can present your scheme to lenders in a way that accurately reflects both the costs and the value premium that conservation area settings command.
At the premium end of the market, Hampstead and Belsize Park represent some of the most valuable residential real estate in the country. Development finance for projects in these areas often involves the sensitive refurbishment of period properties where build costs can be significantly higher than standard construction but end values justify the investment. Lenders who understand the premium Camden market recognise that a refurbishment in Hampstead, while potentially more expensive per square foot to execute, offers a level of value certainty that makes it an attractive lending proposition.
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Development Finance FAQ
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