Land bridging finance
Land bridging finance is a short-term loan to buy or hold a plot or site, with or without planning permission. It is usually unregulated. LTVs are typically lower than on bricks-and-mortar bridging because land is less liquid and may produce no income, and planning status drives most of the risk. The usual exit is development finance once a scheme is ready, or a sale of the site.
Last reviewed: 4 October 2026
BridgingLoans.online is an independent UK introducer operated by PASECOM GROUP LTD (company 17139327, ICO ZC117546). We do not lend and we do not advise. Nothing on this page is a quote, an MCOB illustration or an offer of credit.
Why do buyers use bridging for land?
Banks are often cautious about bare land, and land sales — especially at auction or in competitive bids — can need fast completion. A land bridge lets the buyer complete quickly, then spend the term on design, planning, surveys and arranging the longer-term funding. Developers, self-builders and investors buying land with planning potential all use it.
How does planning status change the risk?
| Planning status | How lenders usually view it | Typical gross LTV discussed |
|---|---|---|
| Full or detailed permission | The most comfortable land case; value supported by a consented scheme | Sometimes around 60%–65% |
| Outline permission | Principle established; detail and conditions still to resolve | Lower than detailed |
| Allocated in a local plan, no permission | Potential, but timing and outcome uncertain | Lower again; current-use value may be used |
| No permission (“hope value”) | Treated cautiously; many lenders look only at current-use value | Low; extra security may be needed |
| Agricultural land | Specialist; questions about ties, use and access | Usually low |
These are general market observations, not any lender’s criteria. The valuer’s view of the land as it stands today — not its value once built on — is what most land loans are based on.
What do lenders check?
- Title, boundaries and access rights; ransom strips can block a scheme.
- Planning history, conditions, section 106 obligations and any community infrastructure levy.
- Ground conditions, flood risk, ecology and services.
- The borrower’s experience and the plan for the term.
- The exit: who will fund the build, or who will buy the site, and when.
Worked example: a consented plot
Suppose a site with detailed planning is valued at £500,000 and you need £260,000 for 12 months while you arrange development finance, using this site’s teaching defaults.
| Line | Amount |
|---|---|
| Land value (valuer’s figure) | £500,000 |
| Net funds needed | £260,000 |
| Arrangement fee (2% of net, added to the loan) | £5,200 |
| Interest base (net + fee) | £265,200 |
| Monthly interest at 0.85% | £2,254.20 |
| Total interest (12 months, simple retained) | £27,050.40 |
| Gross facility | £292,250.40 |
| Net LTV | 52.0% |
| Gross LTV | 58.5% |
| Total cost of credit (fee + interest) | £32,250.40 |
Indicative educational example using this site’s calculator method: fee = net × 2%; interest = (net + fee) × 0.85% × months; gross = net + fee + interest. The 0.85% a month and 2% fee are teaching defaults, not our rates and not a quote. Valuation, legal and broker costs are not included.
A gross LTV of 58.5% is towards the upper end of what is commonly discussed for consented land. The development lender will need to repay £292,250.40 on day one of the build loan, so that sum has to fit within its own appraisal. If planning conditions take longer to discharge than expected, each extra month adds £2,254.20 of interest. Model the term in the calculator.
Which exits work for land?
The most common is a refinance onto development finance once permission, a build contract and an appraisal are in place. The development lender then repays the bridge and funds the build. The alternative is selling the site, often after improving planning. Hope value on its own is not an exit: if the plan relies on a permission that has not been granted, lenders will ask what happens if it is refused. See exit strategies and alternatives to bridging.
Why is interest usually retained?
Land usually produces no income, so there is nothing to service monthly interest from. Retained interest is therefore common, which increases the gross loan and the LTV. Because land LTVs are already lower, the retained interest takes up a bigger share of the available borrowing. The mechanics are in retained vs serviced vs rolled-up interest.
Which costs are specific to land?
As well as the usual fee, valuation and legal costs, land buyers often pay for topographical and ground surveys, ecology and flood reports, planning consultants and application fees, and legal work on access and boundaries. Many of these fall due during the bridging term and are not usually funded by the bridge. Budget them in cash, alongside the interest, before you rely on the term to obtain planning.
Buying a plot for your own home: see self-build bridging finance. Finished schemes waiting to sell: development exit finance. Buildings for conversion: heavy refurbishment.
Is this regulated or unregulated bridging?
Occupancy is the legal dividing line. If you or a close family member live in, or will live in, the property as a home (the usual test is at least 40% of it), the loan is likely to be a regulated mortgage contract, with affordability checks, consumer protections and usually a maximum 12-month term. BridgingLoans.online is an introducer, not an FCA-authorised broker and not a lender: where occupancy is yes, we pass a complete pack to an FCA-regulated broker, who explains the protections that apply. Investment, commercial, vacant buy-to-let, land and many company or SPV files are often unregulated. Either way the figures here are indicative only and this is not advice or a product recommendation. See regulated bridging and unregulated bridging.
Your home or property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.
Indicative estimate only. Not a quote, illustration under MCOB, or offer of credit. BridgingLoans.online is a trading name of PASECOM GROUP LTD (company 17139327, ICO ZC117546), an introducer, not a lender. Email hello@bridgingloans.online.
Last reviewed: 4 October 2026.
FAQs
Can I get a bridging loan to buy land without planning?
Sometimes, but lenders are cautious. Many lend only against current-use value and may want extra security. Hope value alone is rarely enough.
Will lenders lend against hope value?
Conservative valuers and lenders usually will not. The value with a permission that has not been granted is not normally the basis of the loan.
Can agricultural land be used as security?
Sometimes, usually at lower LTVs, with questions about occupancy ties, current use, access and intended use.
Can I borrow the whole purchase price of a plot?
Not against the plot alone. Additional security on another property is sometimes used; that is a separate assessment.
Are land bridging rates higher than residential?
Land is often priced for lower liquidity and no income. Dated market bands are on the costs and fees guide — guidance only, not our rates.
Next step
Use the calculator for an indicative starting point, then enquire if you want an introduction.