Assetz Capital has updated its development finance proposition to allow planning gain and residual undeveloped land value to be used as equity contributions, increasing leverage for SME housebuilders while reducing upfront cash requirements.
The SME property development lender said the change enables developers to access higher levels of funding from the outset of a scheme, allowing more units to be financed from day one and improving cashflow across projects.
Andrew Fraser, chief commercial officer at Assetz Capital, said: “By recognising planning gain and the value of undeveloped residual land not being constructed as legitimate contributions, we are lowering the upfront cash burden on developers and unlocking additional leverage.
“Developers can now retain more cash for construction, accelerate delivery, and potentially fund multiple schemes concurrently, increasing housing output across the UK.
“Under the updated policy, developers who have invested in securing or enhancing planning approval, as well as those holding additional undeveloped land, can count the resulting value uplift toward their equity contribution.
“All contributions must be fully evidenced, including acquisition costs, planning investment, and site valuation. Purchases at discounted prices do not qualify. All deals are expected to be fully funded, straightforward, and in saleable locations across all regions of the UK.”
Assetz Capital confirmed that the change does not alter its existing leverage parameters, with maximum loan to gross development value remaining at 72.5% and loan to cost at 87.5%.
The lender said its existing deal structure and project monitoring processes remain in place, with the update designed to give SME developers greater flexibility in deploying capital while supporting housing delivery.
The move reflects continued efforts by the lender to adapt its development finance offering to current market conditions, as developers seek ways to maximise leverage and manage cash efficiently amid rising build costs and funding constraints.
