Only 50.8% of applications to discharge planning conditions were determined within eight weeks, according to research published by the Home Builders Federation and Paragon Bank Development Finance on 23 October. For developers already paying interest on a site, the findings bring a financing risk into focus: securing permission does not necessarily make a project ready to build.
The research, based on Freedom of Information requests, reports deteriorating performance and considerable differences between local authorities. The proportion determined within eight weeks fell from 55.6% in 2023/24 to 51.8% in 2024/25, with the latest figure lower again.
These are application-level findings, not a measure of how many development sites are unable to start. A single scheme can involve several conditions, and their timing and significance differ. Nor does the median provide a reliable completion date for an individual application.
For a borrower, the practical question is more specific: which outstanding approval controls the next stage of the project, and how much financial room remains if it takes longer than expected?
The Funding Clock Can Start Before the Building Work
A developer may have completed the acquisition, paid professional advisers and committed substantial equity before contractors arrive. If the site was purchased with borrowing, financing costs can already be accumulating.
Planning conditions can require further details to be approved before particular works proceed. Government guidance for England generally specifies an eight-week decision period for discharge requests, unless a longer period is agreed in writing. Different circumstances require checking against the applicable rules.
Expiry of a deadline should not simply be treated as permission to build. Deemed discharge is available only in eligible circumstances and involves a prescribed process and exclusions. A planning professional or solicitor should establish the position.
The finance agreement adds a separate set of requirements. A planning approval may permit work to begin while the lender still needs documents, reports or evidence before releasing the construction funds.
Two Different Permissions to Proceed
The planning position determines whether the proposed works can lawfully take place. The facility agreement determines whether the lender will release money for them.
Both need to support the programme. A developer should establish the outstanding requirements with their planning adviser, solicitor and lender before treating a proposed start date as funded and achievable.
What an Extra Three Months Could Cost on a £2m Site
Consider a hypothetical developer who buys a site for £2m using £1.2m of borrowing and £800,000 of equity, before acquisition costs. They expect the remaining approvals to be resolved within their original programme, but construction starts three months later.
Assume the £1.2m loan charges simple interest at 0.8% a month and remains unchanged throughout the delay. Interest alone would be £9,600 a month.
| Additional waiting period | Simple interest at 0.8% a month | Other holding costs at £2,000 a month | Combined additional cost |
|---|---|---|---|
| One month | £9,600 | £2,000 | £11,600 |
| Three months | £28,800 | £6,000 | £34,800 |
| Six months | £57,600 | £12,000 | £69,600 |
The illustration excludes extension charges, refinancing costs, changes to contractor pricing and any interest on accumulated interest. Actual costs depend on the facility and the site.
It also shows why the purchase price is the wrong figure on which to calculate interest. The relevant starting point is the outstanding loan and its charging basis, together with any fees that apply to undrawn funding.
If interest is paid monthly, the developer needs cash to service it. If it is added to the debt or met from an allowance within the facility, the immediate cash demand may be different, but the cost still exists.
A Larger Interest Bill Can Reduce the Funding Left to Build
Development facilities are often arranged around an agreed budget, programme and maximum commitment. The amount described as the total facility is not necessarily all available to pay contractors.
Part may cover the acquisition, fees and forecast interest. Where additional interest consumes an allowance within a capped facility, the lender may require a revised budget or further borrower equity before subsequent advances.
The crucial calculation is therefore the remaining usable funding against the remaining cost to complete. A headline loan amount can look adequate while the cash available for future works has become insufficient.
A revised appraisal should show where each additional cost will be paid from. Moving a start date in a spreadsheet without updating interest, cash requirements and the completion programme can conceal the emerging shortfall.
Has Your Start Date Moved but Your Loan Maturity Stayed the Same?
Willow can review the existing facility, remaining funding and revised programme alongside your professional advisers. The assessment can compare an agreed extension with alternative borrowing where appropriate.
Discuss Development Funding →A Delayed Start Can Use Up the Time Reserved for Sales
Interest is only one consequence. A late commencement can shorten the period available to finish construction, obtain completion documentation and sell or refinance the completed scheme before the loan matures.
For example, a hypothetical 18-month facility might allow two months for mobilisation and approvals, ten months for construction and six months for sales and repayment. If the first stage takes five months and the build duration remains unchanged, only three months remain for the exit.
Some activities may overlap, but recovering lost time should be supported by the contractor and project team. It should not be assumed merely because the loan deadline is inconvenient.
If repayment depends on refinancing completed rental units, the revised timetable must also allow for the next lender's requirements. Practical completion, valuation and rental evidence may all matter. A prospective exit loan is not a committed repayment source simply because it appeared in the original appraisal.
An Extension May Be Better Than Replacing the Loan
A delay does not automatically justify refinancing. The existing lender already knows the site and may be willing to consider a revised programme, subject to its assessment and the facility terms.
That discussion should establish whether an extension is available, its cost and any additional conditions. The lender may request updated valuations, revised cost reports, evidence of progress or further equity. Nothing should be assumed until agreed.
Replacing the loan can introduce arrangement fees, legal work, valuation costs and fresh underwriting. A lower interest rate may not compensate for those expenses over a short additional period.
For illustration, reducing the monthly interest rate on £1.2m by 0.1 percentage points saves £1,200 a month on a simple, unchanged-balance basis. Over six months that is £7,200. If the incremental cost of switching were £20,000, the rate saving alone would not recover it.
However, a replacement facility might offer something more important than a lower rate: sufficient time, usable funding or a structure the existing lender cannot provide. The comparison must assess those benefits alongside the total cost and new obligations.
Bridging Finance Needs a Credible Next Step
A bridging facility may sometimes accommodate a site while outstanding matters are resolved. Its suitability depends on the security, the planning position, the borrower's resources and how the loan will be repaid.
If the intended exit is a development facility, the proposed development lender's requirements should be understood before the bridge is arranged. Otherwise the borrower risks paying for extra time without resolving the obstacle to the next loan.
The gross facility also needs to be reconciled with the net advance. Redemption of existing debt, retained interest and fees can leave less money available than the headline amount suggests.
Willow's bridging finance service can form part of that assessment, but short-term borrowing should support an achievable sequence of events. It cannot itself discharge a planning condition or establish that a scheme remains viable.
The Revised Programme Needs Evidence Behind It
A useful funding review brings the project information together. The planning consultant identifies outstanding submissions and dependencies. The solicitor considers legal requirements and the finance documentation. The quantity surveyor or project monitor assesses remaining costs and the construction programme.
The borrower should also distinguish cash genuinely available to the project from equity tied up elsewhere. Another property may have value, but releasing money from it can take time and create additional secured debt.
Communication with the lender should reflect the facility's reporting requirements. A documented change in the programme is easier to assess than a request for more time with no explanation of what remains outstanding.
Permission, Funding and Delivery Must Remain Aligned
The research provides a timely reason to challenge funding assumptions made when a site was acquired. An eight-week benchmark is not a guarantee that the next construction milestone will be reached on schedule.
A sensitivity assessment can examine what happens if commencement moves by one, three or six months. Those are planning scenarios, not predictions. Their purpose is to identify when additional cash, a loan extension or a different decision becomes necessary.
For some developers, the existing facility will remain suitable. Others may need revised terms or additional equity. Where the updated costs leave too little margin, adding debt may make the position harder to resolve.
Willow's role is to assess the borrowing against the project's current circumstances. That means understanding what can proceed, what remains funded and whether the repayment plan still works—before an administrative delay becomes a financing deadline the scheme cannot meet.
Frequently Asked Questions
Planning-condition delays, development borrowing and revised project programmes.
Does planning permission mean construction can begin immediately?
Not necessarily. The permission may contain conditions requiring approval before relevant works begin. Your planning consultant and solicitor should establish what can lawfully proceed, while the lender separately confirms its requirements for releasing funds.
Does a planning delay automatically extend a development loan?
No. The contractual maturity date remains relevant unless an extension is agreed under the facility terms. Any extension may require updated information, additional fees, revised pricing or further equity.
Can interest continue while a development site is waiting for approvals?
Yes. Interest can continue on outstanding borrowing even when construction has not started. Whether it is paid monthly, retained or added to the balance depends on the facility. Other charges may also apply.
Is refinancing always the best response to a planning-condition delay?
No. An agreed extension or revised arrangement with the existing lender may be more suitable. Refinancing should be compared on total cost, available net funds, timing, security requirements and a credible repayment route.
What information helps assess development funding after a delay?
Provide the current facility agreement and redemption position, outstanding planning conditions, an updated programme, remaining construction costs, available cash and the proposed exit. The assessment should involve the relevant planning, legal and construction professionals.