The Intermediary –- June 2026 - Flipbook - Page 74
BRIDGING
Opinion
Delivering solutions
for developers
P
lanning consent has
always been one of the
most decisive moments
in a development
project. Without it,
a scheme has limited
value and limited momentum.
But consent no longer means a
project is truly ready to build, as
many schemes now face a prolonged
‘pre-construction’ phase. Key causes of
delay include:
Building Safety Regulator (BSR)
gateway approval
Discharge of planning conditions
Biodiversity Net Gain (BNG)
Utilities and grid connection delays
Increased local authority and
statutory consultee scrutiny
Greater technical and
compliance requirements before
commencement
For many, particularly small
to medium (SME) developers and
regional housebuilders, the period
between planning approval and
physical commencement has become
longer, more technical and more
capital intensive.
Developers are now being asked to
commit more capital aer planning,
but before a development finance
facility is ready to drawdown.
Professional fees need paying,
design teams need instructing,
conditions need discharging, plus
BNG obligations may need to be
worked through. In addition, utilities
and grid connections may need
deposits, plus in some cases, BSR
and Gateway requirements need
significant technical resource before a
project can progress.
Each of these steps may be
reasonable in isolation, but together
they can create a meaningful liquidity
challenge. Larger housebuilders may
be able to absorb these costs within
wider balance sheet capacity; however,
it can be much more difficult for SME
developers.
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The Intermediary | June 2026
Equity that should be recycled into
the next site becomes tied up in preconstruction work. A project that is
viable on paper can lose momentum.
This is especially important
because development finance is
usually designed around an active
build programme. If a scheme is
not genuinely ready to mobilise, a
traditional development facility may
not be the most efficient product. This
is where bridging finance is becoming
more strategically important.
Planning bridge facilities
Planning bridge finance can help
developers acquire or refinance a
consented site while they progress
the technical work needed for a
development finance exit. It can
support planning enhancement work,
condition discharge, professional
reports, design coordination, utilities
engagement and early infrastructure
preparation. It can also give the
borrower time to turn a planning
consent into a deliverable scheme.
A bridge should not just extend
the life of a problem, it should
create a pathway to a beer-funded,
beer-understood and more
executable position.
Used correctly, bridging finance
can preserve momentum. It gives the
developer the capital and time needed
to move through the increasingly
complex pre-construction period
without forcing them to overcommit
equity or delay other opportunities in
their pipeline. For SME developers,
that can be the difference between
a site stalling and becoming
development finance ready.
The changing regulatory
environment is also impacting how
lenders assess these transactions, as
it is no longer enough to look only at
the planning consent and the residual
land value. Those remain important,
but they do not tell the full story.
A lender must understand how
the scheme will actually move from
MICHAEL CLIFFORD
is commercial director
at DCI Finance
consent to commencement. That
means looking at the sponsor’s
experience, the quality of the
professional team, the procurement
strategy, contractor readiness, BSR,
utility engagement and the likely exit.
In other words, the question is not
simply, does this site have planning?
The beer questions are: what still
needs to happen before this site can be
built, who is responsible for delivering
those steps, how much will it cost and
how visible is the next funding event?
This is where flexible and
commercially minded lending can
add real value. Modern development
delivery is rarely perfectly linear.
Good borrowers still face delays,
moving requirements and technical
complexity. The job of the lender is to
understand which risks are structural
and which can be managed with the
right sponsor, team and facility.
Increased regulation is changing
how and when finance can and should
be delivered. Planning, building
safety, biodiversity, utilities and
statutory scrutiny are all becoming
more important parts of the same
delivery journey. The positive outcome
should be beer quality assets and
safer, more sustainable buildings, but
the immediate impact is more friction
between consent and commencement,
and that friction comes at a cost.
If the Government wants more
homes to be delivered, it is not
enough to focus only on the number
of permissions granted. We also
need to focus on how quickly viable
permissions can become funded,
mobilised and delivered.
Transitional funding has a growing
role to play, and bridging finance is
becoming an increasingly important
part of development delivery. ●
