A bridging loan for land is short-term secured finance that lets you buy a plot or site quickly, with or without planning permission, and repay the lender from development finance or a sale within months rather than years. Mainstream banks rarely lend on bare land at all, and when they do they move slowly, so bridging finance is often the only realistic way to complete on a site before a competing buyer or an auction deadline.
Land is the most cautious asset class in commercial bridging. It produces no income, its value depends almost entirely on what can be built on it, and lenders know that. This page explains how lenders actually treat land, what they will advance, and what you need in place to get a credible offer.
Key takeaways
A bridging loan for land lets you complete quickly on a site where banks will not lend or cannot move fast enough.
Land LTVs are lower than standing commercial property, and planning status drives how much you can borrow.
Lenders value land in its current planning state, so do not budget on hope value.
The exit, usually development finance or a sale, is the whole case. Build in time for delays.
Additional security can bridge a gap in the LTV where the land alone is not enough.
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Can you get a bridging loan to buy land?
Yes. A good share of the bridging market will lend on land, but appetite varies far more than it does for a let shop or an industrial unit. Some lenders only take land with detailed planning permission, others will consider sites with outline consent or an allocation in the local plan, and a smaller group will look at agricultural or speculative land with no planning at all.
Typical uses for a land bridge include:
Buying a consented residential or commercial site quickly, then refinancing onto development finance once drawings, tenders and the build contract are settled.
Completing on a land lot at auction within the 28-day deadline (see our page on auction bridging finance).
Securing a site while you discharge pre-commencement planning conditions or finalise a Section 106 agreement.
Buying infill plots, garden land or yard space next to property you already own.
Buying land to apply for planning yourself. That is a distinct strategy with its own risks, and we cover it on our bridging loan for planning permission page.
How much can you borrow against land?
Land lending is driven by the loan to value on the day-one valuation, and land LTVs are lower than the 70% to 75% that lenders commonly offer on standing commercial property. The planning status of the site is the single biggest factor in where you land within the range.
Land type
Lender appetite
LTV position
What the lender wants to see
Detailed planning, conditions largely discharged
Widest
Highest for land, still below standing property
Decision notice, approved drawings, appraisal, development finance route
Outline planning or reserved matters pending
Moderate
Lower
Outline consent, plan for reserved matters, realistic timetable
Exit that does not depend on planning, extra property as security
Where the land alone does not support the loan you need, lenders will often take additional security, such as a first or second charge over another commercial property. You can model the numbers with our LTV calculator.
How do lenders value land for bridging finance?
The lender instructs a RICS registered valuer from its panel, and you pay for the report. For land, the valuer will normally report market value in its current planning state, not the value you hope to achieve once you have consent. Hope value may be reflected where the market would genuinely pay for it, but valuers are conservative and lenders more so.
Expect the valuer to look at:
Comparable land sales in the area, adjusted for planning status, size and access.
A residual valuation for consented sites: gross development value less build costs, fees, finance and developer's profit.
Access and ransom strips, rights of way, services and utilities connections.
Ground conditions, flood risk, contamination and any ecology constraints such as nutrient neutrality.
If you are buying below market value, the lender will usually lend against the lower of price and valuation. Read our bridging valuation guide for what to prepare before the valuer visits.
Have a deal in front of you?Send us the property and the numbers. We will tell you quickly whether it is fundable.
What exit strategy do lenders accept on a land bridge?
Because land earns nothing, the exit is the whole case. Lenders want to see a route that is realistic within the term, with time to spare. The three exits we see most often are:
Refinance onto development finance. The most common exit for a consented site. Lenders will want a credible appraisal, a build cost estimate, your track record and ideally indicative terms from a development lender.
Sale of the site. Selling the land to a housebuilder or developer, often after improving the consent. The lender will want evidence of demand and realistic pricing.
Sale or refinance of other assets. Repaying from the sale of another property or a commercial mortgage on a separate asset you own.
Build in a buffer. Planning conditions, Section 106 negotiations and development lender due diligence all take longer than people expect. Our guide to bridging exit strategies sets out the evidence lenders ask for on each route.
What does a bridging loan for land cost?
Land usually prices higher than a let commercial building because the risk is higher, and lower LTV deals price better than higher LTV ones. The main costs are:
Monthly interest, charged on the gross loan and usually retained or rolled up, because land produces no income to service it.
Arrangement fee, typically around 1% to 2% of the loan, usually added to the loan.
Valuation fee and the lender's legal fees, plus your own solicitor's costs.
Sometimes an exit fee, which we try to avoid where the market allows.
Because interest is commonly retained up front, the net amount released on day one is lower than the gross facility. Use our bridging cost calculator to see the total cost and net advance before you commit.
Is a land bridge first charge or second charge?
Most land bridges are on a first charge, which means the lender is first in line to be repaid if the land is sold. If you already have a loan secured on the land, a second charge bridge is possible but rare on land, because the combined LTV leaves little headroom and the first charge lender has to consent.
Second charges are more common as additional security: for example, a first charge on the site plus a second charge on an investment property you own, to bring the overall LTV to a level the lender is comfortable with. The second charge lender will check the existing mortgage, the equity and whether the first lender's consent is needed.
Who are the lenders for land bridging, and why use a broker?
Land bridging is offered by a mix of specialist bridging lenders, development lenders with bridging products and private credit funds. Appetite changes with the market, and many lenders that advertise land lending have narrow criteria in practice: planning only, certain regions, minimum loan sizes or a requirement for development experience.
We work with a broad panel of bridging lenders and know which are active on land at a given time. We package the site, the planning position and the exit so the first lender to see it can give a firm answer. Our page on commercial bridging lenders explains how the different lender types compare. We do not rank lenders, because the right one depends on the site.
What do you need to apply?
Site address, title plan and the agreed purchase price, or the auction legal pack.
Planning documents: decision notice, approved drawings, conditions, any Section 106 or CIL position.
A development appraisal if you intend to build, with build costs and GDV.
Your experience, assets and liabilities, and details of any company buying the land.
A written exit plan with evidence, such as development finance terms or agent sale advice.
Land is usually bought by a limited company or SPV, and lenders typically ask directors for a personal guarantee. Take advice from your solicitor before signing one. A land purchase for business or investment purposes is an unregulated bridge, but if the additional security includes a home you or a close family member live in, the loan may become regulated and we would introduce you to a firm directly authorised by the Financial Conduct Authority.
Unregulated commercial and investment bridging is arranged directly. Any case where the security includes a home you or an immediate family member occupies, including a flat above commercial premises, may be regulated and is introduced to a firm directly authorised by the Financial Conduct Authority. We are not directly authorised by the Financial Conduct Authority ourselves. Your property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
Yes. Many land deals are funded with a first charge on the land plus a first or second charge over another property you own as additional security. This lowers the overall loan to value and widens lender choice. If the other property is your home, the loan is likely to be regulated and must go through a firm directly authorised by the Financial Conduct Authority, which we can introduce.
What are the disadvantages of a bridging loan for land?
Bridging costs more per month than long-term finance, land LTVs are lower so you need more deposit, and interest is usually retained, which reduces the net advance. The biggest risk is the exit: if planning, Section 106 or development finance takes longer than the term, you may face extension fees or default interest. Plan your exit with a buffer.
Can you have a mortgage on a piece of land?
Mainstream lenders rarely offer long-term mortgages on bare land, because it produces no income. Land is usually funded short term with a bridging loan, then refinanced onto development finance when you build, or repaid on sale. Some agricultural lenders fund farmland, but that is a separate market from development land.
What are the top bridging loan companies in the UK?
We do not rank lenders, because the right lender depends on the site, the planning position, the loan size and your experience. Appetite for land changes often. We work with a wide range of specialist lenders and funds, and our commercial bridging lenders page explains how the different types of lender compare.
Can I get a bridging loan for land without planning permission?
Yes, though fewer lenders will consider it and the loan to value will be lower. Lenders lend against the current use value, so the exit must not depend solely on winning planning. Additional security or a larger deposit is common. If your strategy is to buy and gain planning, read our planning permission bridging page.
How long does a land bridging loan take to complete?
A straightforward land bridge can complete in two to four weeks where the valuation and legal work move quickly. Title issues, access rights, missing searches or slow vendor solicitors are the usual causes of delay. For auction land, we start work before you bid so the 28-day deadline is realistic.
