How much can I borrow on land?

The amount you can borrow on land depends on several factors, including whether the land has planning permission, the type of finance you use, and the lender’s criteria. Most lenders consider land purchases higher risk compared to standard residential properties, which means loan-to-value (LTV) ratios are typically lower, and deposit requirements are higher.

Typical Loan-to-Value (LTV) for Land

• Land without planning permission: Most land bridging loan lenders will allow up to 65% LTV of the land’s current value.
• Land with full planning permission: With planning approved, lenders are often willing to increase the LTV to around 70% of the land’s value, as the risk is reduced and the site has a clearer development potential.

Using additional security: If you have another property (e.g. your home) to offer as security, it may be possible to borrow up to 100% of the land purchase price, especially when using a bridging loan for land or moving into development finance.

Borrowing Through Land Mortgages

If you secure a land mortgage, most lenders will allow borrowing of up to 50-70% of the land value. However, this depends heavily on whether planning permission is in place and the land’s marketability. Higher deposits of 30-50% are typically required.

Development Finance and Gross Development Value (GDV)

For those planning to build on the land, development finance can increase borrowing limits. Many lenders will fund up to 75% of the Gross Development Value (GDV), which covers both the cost of the land and 100% of the build costs, subject to Loan to Cost (LTC) and Profit on Cost (POC) requirements.

What Affects How Much You Can Borrow?

• Planning status (full or outline permission).
• Type of finance (land mortgage vs land bridging loan).
• Borrower experience (especially for large developments).
• Property location and resale market demand.
• Additional security offered (e.g. other properties).