One of the most effective strategies we are seeing right now is…
Purchasing land through a Limited Company (SPV) and funding the build via Development Finance.
Why Buy Land Through a Limited Company?
Using a Special Purpose Vehicle (SPV) limited company for land acquisition offers several key advantages:
- Corporation tax on profits rather than personal income tax
- Separation of personal and project liability
- Cleaner structure for joint ventures
- Improved scalability for future developments
- More attractive profile for lenders
For developers planning multiple projects, this structure provides clarity, protection, and long-term flexibility, particularly when building a pipeline of sites.
How Development Finance Works
Development finance is specifically designed to fund ground-up projects.
Typically, lenders can provide:
- Up to 60–70% of the land purchase price
- Up to 100% of build costs (in staged drawdowns)
- Interest rolled up to ease cash flow during construction
- Terms between 12–24 months
Funds are released in stages as works progress, helping you manage capital efficiently while maintaining liquidity for future opportunities.
Case Study Example
We recently worked with a developer acquiring a £500,000 site for a small residential scheme.
The project was structured through an SPV, with funding arranged at 65% of the land value and 100% of the build costs. This allowed the client to proceed with a significantly reduced initial cash input while preserving working capital for additional opportunities.
Upon completion, the scheme achieved a strong uplift in value, enabling the developer to refinance onto a long-term facility and release equity for their next project.
Why This Structure Works
When structured correctly from day one, this approach allows you to:
- Control larger projects with less upfront capital
- Protect personal assets
- Maximise tax efficiency
- Improve return on investment
- Exit via sale or refinance onto long-term lending
Whether you are building to sell or refinance onto buy-to-let, planning your funding strategy before exchanging contracts is critical.
If you are currently reviewing a site or considering your next development, we would be happy to provide a tailored funding illustration based on your project figures.
Let’s ensure your next development is structured for maximum efficiency and profitability.
