United Kingdom. Short-term property finance
What is development exit finance, and what does it cost?
A development loan is priced for construction risk. Once the scheme is built, or nearly built, that risk has largely gone and the loan is usually the most expensive money on the balance sheet. Development exit finance replaces it with cheaper short-term debt while the units sell, which releases equity, removes the pressure of an approaching development-loan expiry and buys time to sell properly rather than at a discount. This page explains how it is priced and what to check, then puts your details in front of lenders and brokers who write it.
What moves the price of a UK development exit facility, 2026
Last updated
Exit finance is quoted as a margin over a base plus fees, and borrowers compare the headline rate while the total cost is decided elsewhere. This table sets out each component, who sets it, which direction it moves and the question that settles it in writing.
The Bank Rate figure is the Bank of England's own published rate, 3.75% effective 18 December 2025, read on 15 August 2026 and cited below. Everything else in this table describes the STRUCTURE of a facility, not a price: no rate, margin or fee level is quoted, because pricing in this market is quoted case by case against the specific scheme and no published source sets it. That is a deliberate limit. Where a comparison site publishes a headline rate for this product it is illustrative rather than an offer, and repeating one here would put a number on this page that no lender is bound by. The column that matters is the last one, which is the question to put in writing before signing.
| What you are charged | Who sets it | Which way it moves | What to ask, in writing |
|---|---|---|---|
| The base rate | The Bank of England | Bank Rate has been 3.75% since 18 December 2025 | Is my margin over Bank Rate or over the lender's own cost of funds? |
| The margin | The lender, per scheme | Down as completion certainty rises and loan to value falls | What margin, and does it step down at practical completion or on first sale? |
| Arrangement fee | The lender | Usually a percentage of the facility, charged on drawdown | Is it deducted from the advance or payable separately, and is it refundable if I do not draw? |
| Exit fee | The lender | Charged on redemption, sometimes on GDV rather than on the loan | Is the exit fee on the loan or on gross development value? The difference can be large |
| Interest treatment | The lender | Retained, rolled or serviced, which changes your net advance | Is interest retained up front, and if so how many months? |
| Broker fee | The broker | Separate from the lender's fees | Are you paid by the lender, by me, or both, and how much? |
| Term and extension | The lender | Extensions usually cost a further fee | What does an extension cost, and what happens if units are unsold at expiry? |
| Security and guarantees | The lender | Personal guarantees are common on smaller facilities | What is being taken as security, and is a personal guarantee required? |
- The Bank of England's Bank Rate has been 3.75% since 18 December 2025, down from 4.00% in August 2025 and 4.25% in May 2025.
- An exit fee charged on gross development value rather than on the loan is a materially different number, and both structures exist.
- Retained interest reduces the net advance, so a facility's headline size and the cash you receive are not the same figure.
- Extensions are normally priced as a further fee rather than being included, which matters when unsold units delay redemption.
- Any firm you deal with can be checked free on the FCA's Financial Services Register before you share anything.
Cite this page
“What moves the price of a UK development exit facility, 2026”, Development Exit Finance, https://devexitfinance.co.uk/ (updated 2026-08-15). The Bank Rate figure is the Bank of England's own published rate, 3.75% effective 18 December 2025, read on 15 August 2026 and cited below. Everything else in this table describes the STRUCTURE of a facility, not a price: no rate, margin or fee level is quoted, because pricing in this market is quoted case by case against the specific scheme and no published source sets it. That is a deliberate limit. Where a comparison site publishes a headline rate for this product it is illustrative rather than an offer, and repeating one here would put a number on this page that no lender is bound by. The column that matters is the last one, which is the question to put in writing before signing.
Go deeper
Sourced, dated, kept current.
- What development exit finance is, and when it helps
Exit finance refinances a built or nearly built scheme onto cheaper short-term debt. When it saves money, and when it just moves the problem.
- How development exit finance is priced, line by line
Margin over base, arrangement fee, exit fee and interest treatment. Which lines move the total most, and the questions that settle each one.
- Is development exit finance regulated, and what protects you
Most commercial property lending to a company sits outside FCA regulation. What that means for complaints and compensation, and how to check a firm.
How it works
- Tell us about the scheme, the current facility and how far through you are. Two minutes, no account.
- We pass your details to lenders and brokers active in development exit finance, and to no one else.
- They come back with terms. We do not see a commission from you and we do not advise you on which to take.
Development Exit Finance is an independent introducer site operated by Ellul Solutions Ltd. We are NOT authorised or regulated by the Financial Conduct Authority, we are not a lender and we are not a broker. We do not advise, arrange or recommend any facility, product or firm: we introduce you to lenders and brokers who may be able to help, by passing your details to them, and they deal with you directly. We may be paid a fee or commission by a firm for that introduction, which never changes what you are quoted. Nothing on this site is financial, legal or tax advice, and no rate or fee level is published here because this market quotes case by case. Development exit finance to a company against property held for sale or investment is normally outside FCA regulation, so protections including the Financial Ombudsman Service and the Financial Services Compensation Scheme may not apply; check any firm on the FCA's Financial Services Register before you share documents or pay anything.
Questions, answered directly
What is development exit finance?
Short-term borrowing that replaces a development loan once a scheme is built or nearly built. Development lending is priced for construction risk, and at practical completion most of that risk has gone, so continuing on the original facility means paying a construction premium on a finished building. An exit facility refinances it while the units sell, which typically lowers the cost of borrowing, can release equity where the completed value supports more, and removes the pressure of an approaching development-loan expiry.
When can I take development exit finance?
Most lenders in this market will look at a scheme at or close to practical completion, and some will consider it earlier where the remaining works are cosmetic and warranties are in place. Earlier than that and you are effectively asking for development finance again. The practical advice is to start before the existing facility is inside its final quarter, because refinancing involves a valuation and a legal process and doing it against an expiry that has already passed removes your negotiating position.
How is development exit finance priced?
As a margin over a base rate plus a set of fees. The Bank of England's Bank Rate has been 3.75% since 18 December 2025. Beyond the margin there is normally an arrangement fee on drawdown, an exit fee on redemption, and often a broker fee. We publish no rate or fee levels because this market quotes case by case against the specific scheme and no published source sets them; a number here would be one no lender is bound by.
What is the difference between an exit fee on the loan and on GDV?
Potentially a great deal of money. An exit fee expressed as a percentage of the facility and one expressed as a percentage of gross development value are different products with the same label, and on a scheme where GDV materially exceeds the loan the second is much larger. Both structures exist and neither is improper. Get the quote to state which in writing before comparing it with anything else.
What is retained interest and how does it affect me?
Where interest is retained, the lender holds back several months of it from the advance, so the facility size quoted and the cash reaching your account are different numbers. It is standard in short-term lending rather than a trick, but it changes what the money actually does for you. Ask how many months are retained and what happens to unused retained interest if you redeem early.
Is development exit finance regulated by the FCA?
Usually not. Consumer protections in UK lending broadly attach to borrowing by individuals secured on a home they or a relative occupy, and this is normally lending to a company against property held for sale or investment. That means the routes consumers rely on, including the Financial Ombudsman Service and the Financial Services Compensation Scheme, may not be open to you, and your protection is the facility document. Have a solicitor read it, particularly default and extension provisions.
How do I check a lender or broker is legitimate?
Search the firm on the FCA's Financial Services Register, which is free and public, before sending documents or paying anything. Many firms here are authorised for other activities even where this facility is unregulated. The FCA also publishes scam guidance describing a pattern that fits this market: pressure to pay an upfront fee quickly to an entity whose name differs slightly from the one you were introduced to. Be careful with any fee payable before you hold a written offer.