Types of Land at UK Auctions
How Lenders Assess Land Value
Without a building on it, land has no inherent income and no shelter value — it is purely speculative or development-driven. Lenders assess land value based on its current use value (CMV) and, where relevant, its development value (what it would be worth with the benefit of planning permission). Agricultural land with no development potential is typically the most difficult to finance; greenfield land with planning permission is highly financeable
Planning Permission and LTV
Common Finance Structures for Land at Auction
Case Studies
Case Study: Infill Plot with Full Planning, Residential Dwelling, Hertfordshire
A self-build buyer purchased an infill plot with full planning permission for a four-bedroom detached house in Hertfordshire at auction for £285,000. Auction Finance UK arranged land bridging finance at 60% LTV (£171,000). The buyer then drew down development finance for the construction works, with an eighteen-month facility. The completed house was valued at £750,000, at which point a self-build mortgage was arranged to repay the development loan.
Case Study: Greenfield Site, Outline Planning, Speculative Purchase, Warwickshire
Case Study: Brownfield Site, No Planning, Birmingham
FAQs
It is possible, but the small loan sizes involved mean that many specialist bridging lenders will not consider the case — it is below their minimum loan threshold. If you own adjacent property that could be offered as additional security, this can make the case more attractive.
Almost always, yes. The grant of planning permission is typically the most significant single value event in a piece of land’s development journey. In some high-demand urban areas, the difference between bare land and consented land can be tenfold or more.
Yes — this is a common use of land bridging finance. The borrower purchases the land at auction, pursues a planning application during the bridging term, and exits either by selling the land with planning permission or by converting to development finance.
If planning is refused and the land cannot be sold at a price sufficient to repay the bridging loan, the borrower will need either to pursue an appeal, modify the application, or find an alternative exit.
Yes. SDLT applies to land purchases in England. Agricultural land may have APR implications for inheritance tax. Land used for development is subject to capital gains tax and corporation tax rules. Tax advice from a specialist property accountant is strongly recommended.
