Pre-Planning Bridging Finance: secure the site before permission lands

Pre-planning bridging funds the purchase of a site before planning permission has been granted, giving you ownership and control while you take the scheme through the planning system. When consent lands, the site is worth more and you refinance onto development finance to build.

It is a real product and it is used successfully. It is also the hardest thing to fund in short term lending, and the reason is simple arithmetic: a lender sizes the loan against what the land is worth today, without consent, and you are paying a price that assumes consent. The gap between those two numbers is cash you have to find.

Only 8 of the 67 short term lenders we track (our wider panel runs to over 120 lenders across all product types) will lend on land with no planning permission, against 32 who take land generally. This page explains how it is sized, what the cash requirement really is, what planning risk means to a lender, and what happens when a determination slips or a decision goes against you.

How a lender sizes it, and the number that stops most deals

Development land is bought on hope value. A field with an allocation and a reasonable prospect of consent for ten houses sells at a price reflecting those ten houses, discounted for the risk that they never happen. That is a rational price and it is what you will have to pay.

The lender does not fund hope value. It funds a percentage of what the site is worth today, in its existing use, with no consent and no certainty of one. On bare land that figure is frequently a fraction of the price.

The clearest published position we have found on our index is a lender offering up to 65% loan to value generally but up to 50% on land only, specifically stating that the facility can be accepted without planning permission. Fifty per cent of current value is a fair working assumption for bare land across this part of the market.

What that leaves you to find

Four versions of the same £400,000 purchase, on an 18 month term at 1% a month with a 2% arrangement fee and interest retained:

The spread between the first and last rows, on an identical purchase price, is £122,000.

The distinction that decides everything

Read that table again and the pattern is obvious. Pre-planning bridging works reasonably well where the security has real standing value, and barely works at all on bare land.

A house with a large garden, a commercial building ripe for conversion, a yard with an existing industrial use, a pub, a barn with an agricultural use: all of these have a value a valuer can evidence today, independent of the planning you hope to get. A lender can advance 60% to 70% of that, and the cash gap becomes manageable.

A field with an allocation and nothing else has an agricultural value, and 50% of an agricultural value against a residential development price is not a loan that gets you to completion.

The planning risk spectrum

Lenders do not treat all pre-planning situations the same, and the spectrum runs from almost fundable to genuinely not.

A site with a lapsed consent. The strongest position. Permission existed, which proves the principle of development was acceptable, and policy may not have moved. Lenders are most comfortable here, leverage is highest and pricing is keenest. The questions are why it lapsed, whether a material start was made, and whether policy or the local plan has changed since.

An allocated site in an adopted local plan. Strong. The authority has already identified the site for development in principle. The remaining risk is the detail: scale, access, design, affordable housing and section 106 obligations.

A positive pre-application response. Useful, but worth less than developers assume. A pre-app response is an officer's non binding view on an outline proposal. It is not a decision, it does not bind the authority, and it carries no weight at committee. Lenders treat it as evidence of reasonableness rather than as a probability of consent.

Permitted development or prior approval. Where the scheme falls under permitted development rights the risk profile changes entirely, because the authority is assessing limited specified matters rather than the principle. Lenders are much more comfortable, and several who will not lend on open planning risk will lend here.

A site with planning history but no current consent, such as a refused or withdrawn application. The lender will want to understand why, and a refusal on principle is very different from a refusal on detail.

A site with nothing. No allocation, no history, no pre-app, no policy support. This is speculation rather than development, and the lender is being asked to fund it against existing use value only, at the bottom of the leverage range if at all.

Where you sit on that spectrum determines the leverage and the price far more than your own track record does. Moving up it before you approach a lender, by obtaining a pre-app response or evidencing the allocation, is worth real money.

Who lends on it

Eight of the 67 lenders on our index will take land with no planning permission. Their shape is unusual and worth understanding, because it is barbell distributed rather than evenly spread.

Two will do it small, with minimum loans of £50,000, maximum facilities of £5m and terms of 12 to 24 months.

Six will do it large, with minimums of £1m, £2m or £3m and maximum facilities running from £25m to £100m, on terms up to 36 months. These are the institutional and family office lenders, looking at sites of a scale that justifies their involvement.

There is very little in the middle. A £400,000 land purchase sits awkwardly: above the comfortable range of the small lenders' typical business and well below the minimum of the large ones.

Headline loan to values among the eight run from 60% to 80%, but read those against the land-only caveat above. The headline figure is usually for property security, not bare land.

Two further lenders state plainly that planning is not required on their lending generally, which widens the field where the security is a property rather than a field. One of them runs a named pre-planning route: buy the property, obtain planning, and the same lender then funds the build costs, which removes the refinance risk entirely. We have evidence of exactly that sequence completing, a bridge taken while planning was worked up and a refinance onto a development facility once consent was granted, completed in three weeks.

And at least one lender states explicitly that it will not lend on land without planning, which is a useful reminder that the published position varies and has to be checked rather than assumed.

Term, and what planning actually takes

Take a longer term than the statutory timescales suggest. The gap between the two is substantial, and it is the single most common reason these facilities need extending.

The statutory determination periods are 8 weeks for non-major applications, 13 weeks for major development and 16 weeks for EIA development, running from the valid application date.

What actually happens on major applications is a different picture. In the most recent quarter, only 19% of major applications were decided within the statutory 13 weeks. A further 72% were decided within an agreed extension of time or a planning performance agreement, and roughly one in ten missed the target even with an extension in place. Mean determination times run around 30 weeks in faster regions and well beyond that at individual councils.

Before the clock even starts, allow for pre-application engagement, which commonly takes 6 to 12 weeks, plus the time to prepare the application itself. Design, surveys, ecology, transport, heritage and drainage work can easily take three to six months on anything substantial, and some surveys are seasonal, which can add a year if you miss a window.

A realistic timeline from purchase to consent:

So take 18 to 24 months, not 12. Most lenders have no early repayment charge and rebate unused interest, so the longer term costs little, and the alternative is an extension fee of 1% or more at exactly the point you can least afford it.

And budget for the section 106 stage specifically. A resolution to grant is not a permission. The decision notice is not issued until the section 106 agreement is signed, and that negotiation routinely adds months after the committee has said yes. Developers celebrate at resolution and then wait.

Options and conditional contracts: the alternative to buying

For many pre-planning situations, not buying at all is the better answer. The cash arithmetic above is the reason.

An option agreement gives you the right, but not the obligation, to buy the land within a period, at a price usually set by formula rather than fixed. The formula is commonly a percentage of open market value with consent, typically 80% to 90%, less your promotion costs. You pay an option fee, which can be nominal or substantial depending on the negotiation.

What it costs: the option fee, your planning costs, and the discount in the price formula. What it saves: the entire purchase price and the entire bridging facility, until you know you have consent.

A conditional contract is an exchange of contracts conditional on planning being granted. You are committed to buy if consent comes, which gives the seller certainty an option does not. A deposit is normally paid and completion follows consent.

A promotion agreement is different again: a promoter takes the land through planning at their own cost and takes a share of the net sale proceeds, commonly 15% to 25%. Used where the landowner wants the uplift without the work and the promoter does not want to own the land.

When a bridge beats an option

When the seller will not grant one. Many will not. An option ties their land up for years with no certainty of a sale, and a seller who needs cash now will take a lower price from a buyer who completes.

When the situation is competitive. A seller choosing between an unconditional offer and an option will usually take the cash.

When the site has existing use value or income. If you are buying a commercial building with a tenant, or a house you can let while you apply, you own an income producing asset during the planning period rather than paying for the right to buy one. This is also exactly the case where the bridging arithmetic works.

When the uplift is large enough to absorb the cost. If consent takes a £400,000 site to £900,000, paying full price now and funding it is a different proposition to a site going from £400,000 to £500,000.

When speed matters. Options take months to negotiate. A bridge can complete in weeks.

When you want to start on site the day consent lands. An option holder still has to complete the purchase after consent, which takes time and money at the point the clock matters most.

What happens if planning is refused

The honest section, because a pre-planning bridge is the one short term product where the downside case is genuinely likely.

First, what the bridge is costing you while you decide. On the bare land example above, a £75,000 facility at 1% a month is £750 a month, which sounds manageable. But the interest was retained up front and the term is running. The real cost of a refusal is not the interest, it is that your exit has disappeared and the facility still has an end date.

Option 1: sell at existing use value. The cleanest exit and usually a loss. You paid £400,000 for something worth £150,000 without consent, and a refusal means you are selling into that market. The bridge gets repaid from the proceeds and you absorb the difference. This is the scenario that should be modelled before you buy, not after.

Option 2: reapply with a revised scheme. Frequently the right answer where the refusal was on detail rather than principle: scale, design, access, overlooking. There is normally a free go, in that one further application on the same site can be submitted without a fee within 12 months of the refusal. Budget another 6 to 12 months and make sure the facility term covers it.

Option 3: appeal. Worth understanding properly, because the numbers are not encouraging. In the 12 months to June 2026 the Planning Inspectorate decided 15,195 planning appeals.

Only about 31% of planning appeals succeed. Written representations, which is the route almost everybody takes because it is by far the cheapest, succeeds under 30% of the time and adds four months at the median, nearer six and a half on the mean. Hearings and inquiries do considerably better on outcome, but they cost multiples more and add six to eight months on average.

So an appeal is roughly a one in three shot that extends your facility by four to seven months. It can absolutely be the right call where the refusal was poorly reasoned or contrary to officer recommendation. It is not a plan.

Option 4: hand it back. Where the facility is interest retained and the site will not sell for enough, a negotiated surrender or a sale by the lender. You lose the cash you put in, which on these deals is most of the purchase price.

Refinancing onto development finance when consent lands

This is the exit, and there is a question in it that catches people.

The straightforward part. Once you have a decision notice and a signed section 106, the site is worth more. A development lender will fund the scheme, repay the bridge, and advance against the land as part of total project cost.

The part that catches people. Development finance is sized against cost, not value. Your loan to cost calculation uses what you paid for the land, not what it is now worth with consent. So the uplift you have just created does not automatically turn into borrowing capacity. Our page on senior development debt explains how the cost and value tests interact.

Some lenders will use the current consented value of the land in the cost calculation rather than the historic purchase price, which effectively recognises the uplift and reduces the equity you need. Others will not, or will only do so after a period of ownership. The practice varies and it is not usually published.

Where an ownership rule applies it is commonly six months from your purchase, and on a pre-planning bridge that is rarely a problem, because planning will have taken considerably longer than six months anyway. This is one of the few situations where the six month rule is irrelevant by the time you reach it.

What to do about it: ask the question before you draw the bridge, not when you are refinancing. Identify a development lender who will work from consented land value rather than purchase price and you may need materially less equity at the development stage. That single question can be worth more than the rate on the bridge.

And the cleanest version of all: use a lender who will do both. At least one on our index offers exactly that, funding the purchase while planning is obtained and then funding the build, which removes the refinance risk and the second set of legals entirely.

Strategic Use Cases for Developers with Bridging Finance Broker

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