Land Bridging Loans: with or without planning

Borrowing against land: the reality

Land is the hardest asset in bridging: no rent, no comparables, exit entirely dependent on what happens next. That's why loan to values are lower and lender choice is narrower, and why a broker who knows which lenders actually like land earns their fee.

With planning vs without

• Full planning: best LTVs, most lenders, value uplift already proven
• Outline planning: the middle ground. More lenders than hope value, fewer than full consent, and priced deal by deal
• No planning / hope value: the hardest. Lenders price the risk, and pre-planning bridging exists exactly for this
• Agricultural: its own rules and its own lenders

Buying before planning is granted? See pre-planning bridging.

Why land without planning is worth less than you think

This is the part people get wrong. Land with planning has a value you can point at, because the council has said you can build on it and a house is worth something. Land without planning is only worth what somebody will pay for it exactly as it stands.

I've got a client who owns stables on a piece of land. To someone with horses, that land is worth a lot. But you need to find the person who owns horses and wants land for them, and that's a very small group of buyers, so it's a small value. Same with the mountainside I filmed on recently. There's nothing on it, so what is it actually worth to anyone?

So if you're buying or refinancing land with no consent on it, start from the assumption that it values lower than you think. That isn't pessimism, it's what the valuer will do.

What lenders do before they say yes

You can borrow against land with no planning on it. But you're into a small group of lenders and low leverage: around 50% loan to value, and that's the gross figure. Net it down for the interest and the fees and you're nearer 40%, so you're finding the other 60% yourself, or leaving it in if you already own the land.

The lenders who do this usually have a real estate team in house, often people who've been developers themselves. They'll go and do their own digging. What has this local authority been approving, what is the street like, is the application realistic. A three bed house on a residential street is a very different conversation to a sixteen storey block of flats on the same street.

I had a client who wanted to buy a plot in a residential area and was confident planning would come. He'd done the research himself and found the council had been approving that type of development. That's the right starting point, and it's exactly what the lender will go and check.

The risk nobody mentions

Say you buy the land, the lender funds it, and planning is refused. You've now got a debt secured on something most people place very little value on. That's why lenders go so carefully here, and it's why the exit matters more on land than on almost any other bridge.

Exit routes lenders believe

The exits lenders believe: selling to a developer, refinancing for a self build, or rolling into development finance once planning lands, which we also arrange. The exit defines the deal.

What the lender checks on a permission

Planning permission takes one big uncertainty off the table. It doesn't take them all off, and "it's got planning" isn't enough on its own. Government planning guidance is clear that outline permission only establishes the general principles of how a site can be developed, with reserved matters approved later. Reserved matters can cover access, appearance, landscaping, layout and scale.

So a lender needs to know the status of a permission, not just see the word approved:

• Is it outline or full?
• Are reserved matters still outstanding?
• Are there pre-commencement conditions to discharge?
• When does the permission have to be implemented by?
• Is there a Section 106, CIL, or any other contribution to pay?
• Does what's been consented actually match what you're planning to build?

The due diligence that matters

Before you exchange, the finance conversation needs to sit alongside the legal, planning and development work. These are the questions that turn a cheap-looking plot into an expensive problem.

Section 106 and CIL

Planning obligations, usually called Section 106 agreements, are legally binding and used to deal with the impact of a development. Government guidance is clear that they run with the land, so they come with the site.

The Community Infrastructure Levy is a separate charge the local authority can apply to new development where they've got a charging schedule in place. Both of them can make a real dent in the appraisal and in the cash you need, so get them understood before you rely on a GDV or a profit figure.

Biodiversity Net Gain: what changed on 6 August 2026

For development in England, BNG rules affect the scheme and the cost. Qualifying development is generally expected to deliver a 10% biodiversity gain, though there are exemptions. Three things changed on 6 August 2026 and they're worth knowing:

• A new exemption for small sites. BNG doesn't apply where the site area inside the red line boundary is 0.2 hectares (2,000 square metres) or below. But that's only where there's no impact on any priority habitat. The size on its own isn't enough.
• A new exemption for temporary developments permitted for five years or less.
• The self build and custom build exemption has gone. If you're building your own home and you thought you were outside BNG, you're not any more.

Don't assume a site's exempt without checking the current rules against the actual application.

Flood risk and contamination

Flood and contamination issues hit the planning, the value and the build cost. Environment Agency guidance sets out when you need a flood risk assessment, including development in Flood Zones 2 or 3 and some sites in Flood Zone 1. Government planning guidance also says contamination can limit or completely prevent development if it isn't dealt with properly.

Gross and net matters on land too

The headline loan to value isn't what turns up at your solicitor. If the facility is capped on a gross basis, the retained interest and the lender's fees sit inside that maximum and come off the day-one advance. So ask for the net advance and the redemption figure, then check you've got enough cash for the purchase, the tax, the legals, the planning costs and a contingency.

From land to build: the four stages

Some lenders will take you through all four stages under one roof, which makes the move from land to build a lot smoother than arranging every piece separately. Worth knowing which route you're on at the start, because a bridge taken without a development finance plan behind it is a bridge with a weak exit.

If planning is refused or delayed

This is where a land bridge gets uncomfortable. You still owe the loan even if the planning authority says no. The interest and the costs don't disappear because the planning strategy didn't work. And think about what the security is at that point: a piece of land that most people don't want, in a market with very few buyers.

What a Plan B might look like:

• Revising the scheme and going back in, where your professional advice supports it.
• Appealing the refusal, where that's appropriate and where the term and your cash position can take the timetable.
• Selling the site as it stands.
• Refinancing from somewhere else that doesn't depend on the permission you haven't got.
• Repaying it from other resources, where they genuinely exist and you can evidence them.

Before you exchange: the checklist

• I know exactly what I'm buying and my solicitor has been through the title.
• I've confirmed legal access, and any easements or covenants that matter.
• I know whether planning is absent, outline or full, and whether reserved matters or conditions are outstanding.
• I've checked when the permission expires or has to be implemented.
• I've looked up what this authority has recently approved and refused nearby.
• I understand any Section 106, CIL or other obligations that apply.
• I've checked whether BNG applies, including the priority habitat point, and budgeted for it.
• I've checked flood risk, contamination and anything else abnormal about the site.
• I've got realistic build and professional costs, with contingency in them.
• I've got evidence for the GDV, not an optimistic asking price.
• I know my gross facility AND the net day-one advance.
• I've got enough cash for my contribution and everything sitting outside the loan.
• The term gives me a realistic planning timetable, with room in it.
• I know the development finance or refinance route after planning.
• I've got a Plan B if planning is delayed, changed or refused.
• I'm not exchanging just because the headline LTV or the rate looked good.

Sources: GOV.UK Making an application (outline permission and reserved matters), Planning obligations (Section 106), Community Infrastructure Levy, Understanding biodiversity net gain, Flood risk assessments, Land affected by contamination. Planning references accessed 17 August 2026.

What the build finance actually looked like

With permission in place he wanted to build it rather than sell it, and that moves out of bridging and into development finance. Against the £200,000 land value:

The day-one money got the build started and the foundations went in. After that it worked in stages: the lender sends a valuer out to check the work has actually been done, and done to a standard, and only then does the next tranche get released, roughly £50,000 at a time out of the £200,000.

Two things worth pulling out of that. The build facility was £200,000 against a build costing £250,000, so you fund the difference. That isn't the lender being awkward, that's the point: you put some skin in the game and get the first stage done before anybody releases anything. And the day-one advance was only about a third of the land value, even with permission granted. Land with planning on it is worth a lot more than land without. It's still land until there's a building on it, and lenders price it that way.

The figures above relate to the circumstances and the lending terms available at the time of that transaction, and the terms available to somebody else may be different. Planning outcomes are decided by the local authority and can't be guaranteed by any lender or broker. A valuation uplift after a grant of planning permission is specific to that site and that permission, and shouldn't be assumed.

Common Questions About Land Bridging Finance – Bridging Finance Broker