"By recognising planning gain and the value of undeveloped residual land not being constructed as legitimate contributions, we are lowering the upfront cash burden on developers and unlocking additional leverage"
- Andrew Fraser - Assetz Capital
Assetz Capital has updated its development finance product to allow both planning gain and residual undeveloped land value to count as valid equity contributions for housebuilders.
The Manchester-based lender, which focuses on funding SME property development across the UK, said the change reduces the amount of cash developers must inject at the start of a project. The structure also increases overall leverage and allows more housing units to be funded from the outset.
Andrew Fraser (pictured), chief commercial officer at Assetz Capital, said, “By recognising planning gain and the value of undeveloped residual land not being constructed as legitimate contributions, we are lowering the upfront cash burden on developers and unlocking additional leverage. Developers can now retain more cash for construction, accelerate delivery, and potentially fund multiple schemes concurrently, increasing housing output across the UK.”
Under the revised approach, developers who have invested in planning approval or who hold additional undeveloped land can include the uplift in value as part of their equity contribution. Fraser added: “Under the updated policy, developers who have invested in securing or enhancing planning approval, as well as those holding additional undeveloped land, can count the resulting value uplift toward their equity contribution.
All contributions must be fully evidenced, including acquisition costs, planning investment, and site valuation. Purchases at discounted prices do not qualify. All deals are expected to be fully funded, straightforward, and in saleable locations across all regions of the UK.”
To qualify, developers must demonstrate the source and value of their contributions, with Assetz Capital requiring full documentation and independent assessment. The lender said this ensures projects remain commercially viable while giving developers more flexibility in how they structure their funding.
Key requirements under the policy include:
Evidence of planning-related investment and acquisition costs
Independent valuation of residual undeveloped land
Exclusion of sites bought at discounted prices
Projects located in saleable markets across the UK
The update keeps the firm’s existing lending framework in place, including its loan-to-gross-development-value cap of 72.5% and loan-to-cost limit of 87.5%. Assetz Capital also continues to apply its standard project monitoring and due diligence process to each transaction.
The company said the changes are designed to support smaller developers who often face higher barriers to entry when raising capital for new schemes. By broadening what qualifies as equity, the lender aims to help developers move forward with projects more quickly and bring additional housing supply to market.
