Airspace Development Loans

Airspace financing allows you to fund the development of property that sits above existing structures.

If you have found an exciting opportunity to build on an existing residential or commercial property, KP Finance can offer £1 million+ to cover construction and renovation costs, with funds released in stages.

We offer access to funding in weeks, not months and we can provide you with an indicative quote within 24 hours. Speak to our team using the number below or enter your details and we will contact you immediately.

Call +44 203 488 1128

samuel kalms

Samuel Kalms, Director

What is Airspace Development?

Airspace developments means to simply build on top of existing buildings, and this has become more common in recent years following changes in attitudes of the government to relax  the need for planning permission.

The opportunity to build new homes, flats or offices on top of existing dwellings is very attractive. Not only is it sustainable, it allows for new development in dense cities where land is scarce, such as London, offering developers the chance to build on real estate which is a premium and very sought after.

For many lenders, offering airspace lending is deemed too complex and many shy away from it. At KP Finance, we have a lot of experience and viable commercial options in this space and would be delighted to discuss your requirements.

What Are The Features of Airspace Property Finance?

  • Borrow £1 million +
  • Rates from 0.44%
  • Loan period 3 to 24 months
  • Covers all construction and renovation costs
  • Funds released in stages
  • Covers all architectural and engineering fees
  • Residential and commercial properties

Pros of Airspace Development Loans

No planning permission – The government changed rules in 2019 which mean that airspace development is not subject to full planning permission, although a certificate of lawful is recommended.

Increase Value – The opportunity to build onto existing prime real estate in popular areas such as London is very exciting. This offers investors and developers the chance to build and own premium spaces that are typically harder to get.

If the individual owns the building, this can be a great opportunity to increase property value and revenue for the freeholders and the developers who rent out the property to tenants. 

Tailored Terms- Airspace development loans are very unique and specific to the challenges and opportunities of building on existing buildings.

The terms of the loan and agreement are designed specifically to help the developer to achieve their goals. 

Covers Build Costs – The nature of a development loan is designed to cover building costs, making it practical for developers to build or renovate a property and making a profitable margin.

Released in Stages – The funds are released to developers in stages to pay for construction and building costs.

The loan is designed to help build and grow properties within a certain timeframe and is more tailored compared to bridging finance or a typical mortgage.

Sustainable – Airspace development is very promising in the way that it allows more property to be sold on an existing plot, without the need for planning permission.

Some believe that it will add hundreds of thousands of more flats in the UK. But with the structures being built on top of existing builders, there is a case for less waste produced and the materials being constructed off-site and fitted on, which is more sustainable. 

Cons of Airspace Development Finance

Dealing With Tenants – By building on top of existing buildings, there are repercussions for local residents and those living below. This includes noise, dust and pollution. Ensuring that these residents are happy and not disturbed is vitally important.

Time Delays – Development finance loans will be completed after a certain time period such as 12, 18 or 24 months. It is important that your build work does not delay or you could incur late fees or penalties.

There are several factors that could cause delays including reliability of builders, weather, technical issues, backlash from neighbours and regulatory issues.

Cost Overruns – Running over on costs is very common for development projects and making sure that you have clear costs and manage expectations is essential to avoid stopping work and needed to find additional finance elsewhere.

Useful Guides

What does airspace mean in property?

Who owns the airspace above a building?

Do I own the airspace above my property?

What are your airspace permitted development rights?

Do you need planning permission for airspace development?

Do You Offer Bridging Loans For Airspace Development?

Yes, airspace bridging loans can be used to complete deals within a tight deadline. With a maximum LTV of 75%, we offer loans starting from £1 million which can be used for purchase residential and commercial property, including offices, hotels and residentials blocks of flats. 

Our ability to offer structured finance means that we can complete deals in just a few weeks and help you meet a deadline. 

What is The Eligibility Criteria?

KP Finance can provide an indicative quote and decision within 24 hours. We require some key information to check your eligibility.

We will start by getting some information about your property including its full address, valuation and its opportunity for growth. The loan will be secured against the property so understanding its value and potential is key.

We require a clear strategy and exit plan for your property. This includes clear costs and financials of your building work and any other expenses such as legal, surveys, furniture and financial. 

The maximum we can lend is 65% GDV and you will need to provide a substantial deposit through your own funds, savings or investments. We may also request:

  • Financial records and statements
  • Proof of funds
  • Personal credit reports
  • Business plans

Case Studies

planning permission for airspace
Commercial Investment
Residential Investment
Hotel Investment
Residential Development
PBSA Investment
Commercial Portfolio Investment
Residential Bridge-to-Sell
who owns airspace
Residential Portfolio Investment
Mixed-Use Acquisition Bridge

Why Should I Use KP Finance For Airspace Development Loans?

KP Finance was founded in 2016, with its Director Samuel Kalms sharing over 15 years of experience as a debt advisor in the real estate industry.

Whilst most bridging and mainstream lenders will not lend to airspace development, we have an excellent track record in this space and understand the complexities associated with it.

Our passion lies in sourcing the right type of finance and loan facilities for our clients, from £1 million upwards. We enhance the client experience by tailoring our service to their varying, and often complex, requirements. This hands-on personalised approach means we can structure and deliver a facility in line with their business plan.

Frequently Asked Questions

 

What Type Of Properties Allow Airspace Development?

  • Residential homes

  • Blocks of flats

  • Office blocks

  • Hotels

  • Schools and public sector buildings

  • Car parks

  • Stadiums

  • Event venues

  • Shopping centres and shops

  • Health centres

 

Does Airspace Development Require Planning Permission?

A lot of properties do not require planning permission as per an update in Government law in 2020. 

This includes no planning permission to build two additional floors to blocks of flats and the original building must have 3 or more storeys. 

 

How Much Airspace Can I Develop On My Property?

The UK law says that you can build up to a reasonable height and this may vary between local authorities, with some allowing a maximum of 500 feet and others as high as 1,000 feet.