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Land Bridging Loan

What Is A Land Bridging Loan?

A land bridging loans are a short-term financial solution, secured against land, which doesn’t have any buildings on it.

The land bridging loans are typically used by property developers, who purchase the land with the intent to develop on them or change what is already there. 

What Is a Land Bridging Loan Used For?

Land bridging loans are used mainly by property developers, that want to purchase land, that they then plan to develop on.

The bridging loans for property development, give the applicant a chance to acquire the land that they have plans to develop on.

As a result of this, it means development will be carried out and then sold, meaning the loan can easily be paid off.

With most bridging loans for property development, the land likely needs to be purchased first, to then build on it and it’s very rare for property developers to purchase land that already has a building on it.

However, they can renovate what is already there, which is where bridging loans for property development helps out.

The primary use for land bridging loans is that they are used to help with the purchase of land, to carry out a property development project on it, to then sell once complete.

Why Use A Land Bridging Loan?

If land comes up for sale and you want to purchase it for development or personal use purposes, then the land bridging loan can help you out.

It is used as a financial solution and help, in being able to purchase the land and help with the property development project that you may have planned. 

The land bridging loans are given to those who have a plan of what they will be doing with the land, and the loan is used to purchase the land.

This means that at the time, no money is coming out from your own, personal funds, and therefore it can be used towards the costs of the project.

Bridging loans for property development or land bridging loans are the perfect solution, to help you kick start a project and purchase the land needed.

Land Bridging Loans; Eligibility 

When it comes to getting a land bridging loan, you will be more likely to be approved for it, if you have the following:

Planning Permission-

If there is planning permission in place for the land being purchased and plans for what you will do with the land, then you will be seen as a low-risk applicant.

It means you’re prepared and also have a plan in place for what you will be doing with the land. From this, the lender will also be able to determine how much value it will have, after the development.

Exit Strategy-

With any bridging loan, an exit strategy is needed, and evidence may need to be provided to prove the plan.

They may also carry out an evaluation on the development, to determine how much it will be worth and whether it would be enough to pay the land bridging loan back.


It will help if you have experience in the property development sector, and it means you might be seen as low-risk to the lender.

They may ask to see previous development projects that you have worked on, so they can see how likely it is that the development will make money and be able to pay the loan back.

Clean Credit-

By having a clean credit, it will help the lenders to see you as low-risk and result in them giving the loan.

However, this isn’t necessary as the plans for the development and exit strategy, if strong, can get you the land bridging loan, just based off that.

These are a few things to consider when looking for land bridging loans and bridging loans for property development, to make sure you tick the checklist.

These things aren’t all necessary, but they will help you in getting approved for a land bridging loan.

Exit Strategies and Security for Land Bridging Loans

One thing needed for land bridging loans, just like any bridging loan, is an exit strategy and security.

The exit strategy is how you plan to pay the land bridging loans back, which can be done by:

  • Selling the land, after the project development-

Once you have carried out the property development project, the land/ property is sold for more value than it was bought for.

As a result of this, the money from the sale is used to pay the loan back. This is usually how many property developers will repay their bridging loans for property development.

  • Developer finance-

Developer finance works by the lender releasing funds for the work or project, in stages. The loan is then paid back by the sale of the project, so very similar to land bridging loans.

  • Remortgage-

This option is only used if you have funds to build the property, after using a bridging loan to purchase the land.

Once the bridging loan is secured, and the land is bought, you can then use your own funds for the building or renovation project.

Then you can remortgage bases on the post-development value, which can be used as an exit strategy.

  • Self-build mortgage-

The bridging loan is used to purchase the land you plan to develop on, and then a self-build mortgage is used to pay off the loan and fund the work on the development project.

Most of the time, it will be a case of once the property development is complete, the land is sold and the money from the sale, is used to pay the loan back. 

In terms of security that is used to get the land bridging loans, there a number of things to use:

  • Existing property or land
  • Expensive cars, jewellery etc.
  • Anything that has a considerable value to it, that you own.

When it comes to land bridging loans and using them property development purposes, there are several things that the lender will look at and require, to prove that you are low-risk and will be able to pay the loan back.

As it is a property development, it is riskier as you can’t guarantee it will all go to plan and have the predicted value on it, once completed.

However, it is an excellent option for those wanting to purchase land and start a property development project on it.

It helps to fund the purchase of the land, to then be able to start a development project, so essentially allows you to get kick-started. 

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