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Home > Finance > Funding your Development Project –Costs to Consider

Funding your Development Project –Costs to Consider

Published by Gbaf News

Posted on August 30, 2019

5 min read

Last updated: January 21, 2026

Funding your Development Project –Costs to Consider

Before you start your new development project, the most important thing to do is to sit down and work out exactly how much everything will cost you. This will take a lot of research and it may be a good idea to seek help from a professional if this is your first project as you don’t want to leave yourself short of funds and unable to complete your development.

This guide will cover all the main things you will need to take into account.

Planning Permission

Whether you are building an entirely new property, changing the use of a property, building an extension or making exterior alterations to your home, the first thing you will need to do is to apply for planning permission.

As it currently stands, the fee for a full application for a new dwelling, or a change of use, in England is £462 per dwelling. If you are making alterations or building an extension, the fee drops to £206. There is also a £96 prior approval fee on all applications, as well as a fee of £234 for discharge of planning conditions, following a grant of planning permission. These fees may change depending on the size of property and whether you are within boundaries.

You will also have to bear in mind that you may have to submit more than one application if the first one is rejected by the council and you have to make alterations.

You will also have to take into account any architect/designer fees which can vary massively depending on who you use.

Build Costs

The building work will be the biggest cost to your project so it is important to plan this through very carefully. It is impossible to put an exact figure on this as it completely depends on your project and what suppliers (building materials) and builders you use.

However, we would recommend getting quotes from a lot of different builders and companies as prices can vary massively and you want to make sure you’re getting the best price. It is also important to use someone that has a lot of good reviews and is trusted in the area as you will end up paying for any mistakes or problems.

Once you have a quote for the work, it is best to put aside some extra just in case you experience any problems or delays.

Development Finance Facility

Unless you can cover the development costs from your own funds, you will need some form of development finance. The cost of this will depend on your situation and the lender/broker you use, but will generally be made up of some, or all, of the following;

Interest

You will be charged an interest rate on either a monthly or annual basis – typical development finance plans will start from between 4.5% and 5% per annum. The interest rate you will be charged will depend on the amount of deposit you are putting in, your experience as a developer, the amount you’re borrowing and the type and overall risk of the project.

You can find out how much your development project will cost by using an online development finance calculator.

Lender arrangement/facility fee

Most development finance facilities will include an arrangement fee (sometimes know as a facility or administration fee) which will typically be between 1% and 2% of the loan amount. This fee is charged to cover any costs of setting up the loan and will often be added to the facility, meaning it will be payable when the loan is repaid.

Broker fee

If you source your development finance through a broker, be aware that some will charge a broker fee (this could also be called an engagement or commitment fee). It is important to look this up before going ahead with a broker as not all brokers charge this fee.

Valuation fee

Valuation fees will often be quite high for development projects as they have to value more than just the property itself, like for a mortgage or secured loan. A surveyor will need to value the development site as it is, determine the likely development costs, how long the process will take and the likely value of the completed project. This fee will vary depending on your project and the surveyor used.

Solicitor’s fee

In addition to paying your own fees, lenders will often require you to cover any legal costs they incur with regards to your application. Again, it is hard to put an exact figure to this as legal fees will vary depending on your project and the complexities involved in arranging your facility.

Monitoring fees

Throughout the course of development, most lenders will send out surveyors to monitor the progress you are making. These surveys are a very important aspect to the project as the success of them will determine further fund releases to cover your building work (most development finance facilities will consist of funds being released in stages and work is completed.) Same as the valuation fee, the amount charged for these surveys will depend on the lender and surveyors used.

Exit fee

Development finance facilities will often include an exit fee, payable when the loan is repaid. This will typically be 1% – based on either the net loan amount, gross loan amount, or gross development value of the project.