Land Bridging Loans: with or without planning
The definitive UK guide to borrowing against land: what lenders will and won't touch, realistic LTVs, and the exit routes that get deals approved.
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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 land, the lender isn't really lending against the field. They're lending against your plan for it. The stronger and more evidenced the plan, the better the terms."
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.
We're writing this one up: a land purchase funded before planning came through.
See the case studies we have published →Your questions
Can you get a bridging loan on land?
Yes. Fewer lenders do land than houses, but the ones that do are good at it. The deal rests on what the land is, what consent it has and how the loan gets repaid.
Can I get a bridging loan on land without planning permission?
Yes, at lower loan to value, typically around 50%. The lender prices on what the land is worth today, not what it might be worth with permission.
How much can I borrow against land?
With full planning, typically up to 65% of the value, sometimes more on a strong deal. Without planning, around half. The valuation drives everything, so the comparables and the consent position matter more than the asking price.
How is land valued for a bridging loan?
On current use, not hope. A field with permission for four houses is valued as a development site. The same field without permission is valued as a field, however confident everyone feels about the planning committee.
What about agricultural land?
Specialist but doable. Occupancy conditions and agricultural ties change the lender list, so ask us early.
Can I get a loan to buy land and then build on it?
Yes, and it's a common pattern. A land bridge first, then planning, then development finance for the build, then sale or refinance at the end. We arrange each step.
Got a deal like this on your desk?
Tell us the numbers and we'll tell you honestly what's achievable.
Prefer to put it in writing? Email support@bridgingfinancebroker.co.uk