Finance guide · 1 minute readFinancing a conversion or permitted development

Planning comes first

Until consent is granted, lenders lend on the building as it stands today. A lot "with potential to convert, subject to planning" is valued as what it is now.

Some changes need only prior approval under permitted development rights, such as many changes from commercial to residential use. An Article 4 direction can remove those rights in an area: check before you rely on them. Each lot page shows any Article 4 direction we find at its point.

• The decision notice: reference, date, description and expiry
• Which pre-commencement conditions are discharged
• Community Infrastructure Levy, section 106 obligations and biodiversity net gain

The numbers a lender reads

A conversion loan typically funds about 70% of the purchase on day one and up to 100% of the build, within about 65% of the value of the finished homes. Example rates: 0.95% to 1.25% a month.

• Loan to cost: the facility against the price and the build
• Loan to final value: the loan with interest rolled up, against the finished homes
• Profit on cost: most lenders want at least 15 to 20%
• Build cost per sq ft against a benchmark, and the value per sq ft against the strongest comparable

You and your team

Lenders lend on people as much as buildings. Expect to show schemes you have done, or a contractor and professional team who have done this kind of work before. A first conversion is fundable, but usually at a lower loan.

See it on a real lot

Every lot on Auction Watch has a finance view and a calculator that opens on the loan that fits it, with indicative terms on screen in a minute.