Land finance funds the purchase of a site, whether it already has planning permission in place or you’re buying speculatively with a view to obtaining it. Standard mortgages don’t lend against land, and even specialist lenders treat land very differently depending on its planning status, since that’s the single biggest factor affecting both its value and how quickly it can be turned into something worth more.
We work with lenders who understand the difference between a shovel-ready site and a speculative purchase, and we’ll help you find the right one for where your project actually stands.
| Feature | Land With Planning Permission | Land Without Planning Permission |
|---|---|---|
| Typical LTV | Often up to around 60% to 70% | Often considerably lower, commonly 40% to 50% |
| Lender pool | Wider range of specialist lenders | Smaller pool, more specialist appetite required |
| Risk profile | Lower, value is more certain | Higher, planning outcome is uncertain |
| Typical use | Ready to move straight into development finance | Often held while planning is pursued, or bridged short term |
Because planning status affects value so significantly, getting the finance structured correctly at this stage often shapes how the rest of the project can be funded down the line.
Planning outcomes in England vary considerably by local authority and application type. According to Gov.uk planning application statistics, the majority of decided planning applications are granted, though timelines and approval likelihood vary by region and scheme complexity. This uncertainty is exactly why lenders apply lower loan to value ratios on land without planning, and why a
realistic view of your planning prospects matters when you’re putting the finance together.
We compare terms across a panel of specialist development finance lenders, including:
A developer identified a plot with outline planning permission already granted for four houses, priced attractively because the seller wanted a quick sale. We arranged land finance to secure the purchase promptly, with the developer moving straight into ground-up development finance once detailed planning was confirmed shortly afterwards.
An experienced developer wanted to secure a promising plot without planning permission, ahead of a planned application, aware that a competing buyer was also interested. We arranged land finance at a lower loan-to-value reflecting the planning risk, giving the developer the certainty of ownership while the planning application progressed, rather than losing the opportunity to a faster-moving buyer.
Yes, though loan to value ratios are typically lower given the added uncertainty, and the pool of willing lenders is smaller. Your own funds usually need to cover a larger share of the purchase price in these situations
Once planning is secured, land finance is typically refinanced into ground-up development finance to fund the actual build, since the land loan alone doesn’t usually cover construction costs.
This varies by lender and by how realistic your planning timeline is. Some facilities run for twelve months or more, though longer holds usually mean a more detailed conversation with the lender about your planning strategy and prospects.
They’re closely related, and some lenders class land finance as a specific type of bridging product, but the underlying risk assessment is different, since it’s centred on planning status and land value rather than a standard property purchase.
