Outline versus full planning permission and what each level of consent means for your land finance

Outline planning permission establishes the principle of development on a site without settling the fine detail. It tells the market that the local authority accepts, in principle, that the land can be developed for a stated use, for example a given number of homes or a defined commercial floor area. What it does not do is sign off the full design.

An outline consent almost always carries reserved matters, which are the specific details left to be agreed later. These typically cover layout, scale, appearance, access and landscaping. Until those matters are approved, you cannot start building. Outline permission is therefore a strong signal of value, because the principle of development is the hardest hurdle to clear, but it is not yet a shovel-ready position.

For a landowner or promoter, outline consent is often the point at which land value first jumps. The land is no longer bare agricultural or strategic acreage: it now has an accepted development principle attached, and that is what a valuer and a lender will recognise.

Full planning permission, sometimes called detailed permission, approves both the principle of development and all the detail in one decision. There are no reserved matters left to resolve. Subject to any pre-commencement conditions, the scheme is ready to build once funding and the contractor are in place.

Because the design, layout, access and scale are all fixed, full consent removes a large slice of planning risk. A lender can see exactly what is permitted, a quantity surveyor can cost the build against approved drawings, and a valuer can form a clear view of the finished gross development value. That certainty is precisely why full permission usually supports a higher land value and a higher advance than outline alone.

Full consent is the natural gateway to development finance. Where a site holds only outline permission, a development lender will often wait for reserved matters to be discharged before committing, which is one reason the outline to full journey matters so much to how a deal is funded.

Reserved matters are the details deliberately parked when outline permission is granted. An application to approve them must usually be submitted within a set period, commonly a few years, and the development must then begin within a further window. Missing these deadlines can put the consent at risk, so timing is not a side issue.

The reserved matters normally include:

• Layout, how buildings and spaces sit on the site
• Scale, the height, width and footprint of what is built
• Appearance, the look and materials of the scheme
• Access, how vehicles and people enter and move through the site
• Landscaping, the treatment of open and green space

From a finance point of view, unresolved reserved matters mean residual planning risk. A site with outline permission and reserved matters still to be approved sits closer to the pre-consent end of the risk spectrum than a site with full permission. That difference feeds directly into the loan to value a lender is willing to offer and the rate that comes with it.

Land value tends to step up as planning certainty increases. Bare land with no consent is valued on its current or existing use. Outline permission lifts the value because the principle of development is settled. Full permission lifts it again, because the scheme is defined and shovel-ready.

Loan to value moves in the same direction. Before consent, a facility is usually sized against the current value of the land, and lenders tend to advance in a band of around 50% to 65% of that figure. Once a strong consent is in place, the advance can move to around 65% to 75% of value, reflecting the reduced planning risk. A full permission generally sits at the firmer end of that after-consent band, while outline with reserved matters outstanding often sits lower within it.

Pricing follows the same logic. Land bridging against a less certain position typically prices at around 0.75% to 1.1% per month with interest rolled up, while a stronger consented case can move towards senior debt from around 6% to 8% a year. These are indicative bands, not a quoted rate, and every site is assessed on its own facts.

Finance secured on planning gain is short term by nature, with terms usually running from 1 to 36 months and interest rolled up rather than serviced monthly. That short horizon means the exit has to be credible from day one, and the level of consent is central to it.

With outline permission, the likely exit is either a sale of the site once value has been proven, or refinancing after reserved matters are approved and full consent is achieved. The facility needs enough term to allow that planning work to complete without running out of road.

With full permission, the exit is usually cleaner and quicker. The site can be sold as a shovel-ready consented plot, or the land bridge can be refinanced onto development finance to fund the build. Because a development lender wants to see approved detail and a costed scheme, a full consent removes friction from that handover. Whichever route applies, we plan the exit before the facility starts, so the timeline of the planning process and the timeline of the loan stay aligned.

There is no single right answer, and the choice depends on your capital, your appetite and what you intend to do with the site. A developer who plans to build usually wants to reach full permission, because that is what unblocks development finance and lets construction begin. A promoter or investor whose plan is to prove value and sell may find that outline permission achieves most of the uplift for less time and cost.

A few points we suggest weighing up:

• Cost and time, outline is usually cheaper and faster to secure than full detailed consent
• Exit route, a sale can complete on outline, but a build needs full permission
• Reserved matters risk, factor in the time and cost of discharging them before the consent lapses
• Funding fit, decide early whether you are financing the planning stage, the build, or both

Planning gain and land finance for companies, developers, promoters and investors is unregulated commercial lending outside the FCA's regulated-mortgage perimeter. Nothing here is financial, legal, planning or tax advice, and you should confirm planning and tax matters with the right professionals. We are happy to talk through the funding options once you know the route you want to take.