What planning gain finance is and how it works on UK land

Planning gain finance is funding secured against the value uplift that planning permission creates in land. The whole idea rests on one fact: a site is worth far more with consent than without it. Finance built around that uplift lends against where the land sits on the planning journey, from raw ground with only hope value, through allocation, to a full or outline consent.

Everything ties back to planning status. The current value sets the security, the expected consent sets the exit, and the gap between them, the planning gain, is what makes the numbers work. A funder is not lending against a finished building or a rental income. They are lending against land whose value is expected to rise as its planning position improves.

Because that uplift is a hope until consent lands, the finance is priced and structured with caution. Interest is usually rolled up, leverage stays conservative against current value, and the exit is examined closely. Done properly, it lets developers, promoters and landowners hold and improve a site through the planning process without tying up all their own capital, capturing the uplift when it arrives rather than selling too early.

It is easy to lump planning gain finance in with other short-term property lending, but the difference matters.

Development finance funds construction. It is drawn down in stages against a build programme, released as work is signed off, and repaid when the finished units are sold or refinanced. It assumes you already have consent and are building. Planning gain finance is the stage before that: it funds the land and the planning effort, not the build, and it repays when the planning position improves, not when a building is finished.

Generic bridging is short-term money to fill a gap, secured on almost any property, with an exit that is often just a sale or a refinance onto a longer-term product. Planning gain finance can look like a bridge, but its purpose and its exit are specific: the security is land, the value driver is consent, and the repayment comes from the uplift.

• Development finance: funds the build, repays on completion and sale.
• Generic bridging: funds a timing gap, repays on any refinance or sale.
• Planning gain finance: funds the land and its planning uplift, repays when consent lifts value.

Same short-term family, but a different job. The exit is always tied to planning.

Planning gain finance is not one product. It takes several shapes depending on where the land sits on the planning journey.

• Land bridge on consented land: a short-term facility against land that already has planning permission. Because consent is in place, this is the strongest position, and leverage and pricing reflect that.
• Pre-planning bridge: funding against land before consent, where the value still rests largely on hope value. This is the highest-risk form, so leverage is the most conservative and pricing is keenest towards the higher end.
• Promotion and option finance: funding around a promotion agreement or option, where you hold a contractual right to secure consent or buy the land rather than owning it outright.
• Uplift refinance: once consent is granted, refinancing the original land loan onto keener terms that reflect the higher, consented value, often releasing some of the gain as cash.

Each form answers a different moment. Raw land needs a pre-planning bridge; a site that has just won consent may want an uplift refinance; a promoter working someone else's land needs promotion finance. The common thread is that every one of them is secured on land and repaid through improving planning status.

Planning status is the single biggest lever on both how much you can borrow and what it costs. As a site moves along the journey from raw land to full consent, the security gets stronger, so leverage rises and pricing eases.

Before consent, a funder is lending against a hope, so leverage stays cautious, up to around 50% to 65% of current value. Land bridging at this stage tends to sit around 0.75% to 1.1% per month, reflecting the risk that consent may not come. Once consent is in place, the picture improves markedly: leverage can move up to around 65% to 75% of value after consent, and the strongest, fully consented cases can move away from monthly bridging pricing towards senior debt from around 6% to 8% a year.

The logic is simple. Each step that de-risks the planning outcome makes the land worth more and the exit clearer, so a funder can lend more and charge less. Facilities across this market run from around £100k to £25m, over terms of 1 to 36 months, with interest usually rolled up. These are indicative bands, not a quote, but the direction is consistent: consent is what moves the numbers in your favour.

The people who use planning gain finance all share one thing: they see value in land that consent has not yet released, and they want to capture the uplift rather than sell the potential to someone else.

• Planning-led developers who buy sites on the strength of a planning strategy, fund the land and the application, and either build out or sell the consented site.
• Promoters who specialise in taking land through the planning system, often on promotion agreements, and share the proceeds when consent adds value.
• Landowners who want to improve their own site's planning position before selling, so they capture more of the gain themselves instead of selling raw.
• Investors who take positions in land with development potential and want funding that suits a longer, planning-driven hold.

What unites them is that ordinary lending does not fit their moment. They are not building yet, so development finance is premature, and they are not filling a simple timing gap, so generic bridging misses the point. They need funding that understands that the value is in the planning journey, and that repayment comes from consent. That is the case we help put together and place with the right funder.

Because the land usually produces little or no income while it is held, interest is normally rolled up and settled when the facility is repaid, rather than serviced month to month. That means the exit does all the heavy lifting, and it is the first thing any funder examines.

There are two classic exits. The first is sale: once consent lifts the land value, the site is sold, very often to a housebuilder who wants a consented plot to build out, and the proceeds repay the loan and rolled-up interest with the uplift left over. The second is refinance: once consent is in place, the land loan is refinanced onto keener terms, often development finance to fund the build, or an uplift refinance that reflects the higher consented value.

Either way, the exit is tied to planning. Repayment does not depend on a building being finished or a tenant paying rent; it depends on the planning position improving enough to make the land more valuable or more sellable. A credible, evidenced exit is what turns a risky land position into a fundable one. Before you borrow, be honest about which exit repays you, when it is likely to happen, and whether the uplift still covers the loan and the carry if it takes longer than hoped.