Off-plan sales once offered developers an easy way to de-risk projects and demonstrate early demand to lenders. In 2025, however, that relationship has become more complex. While lenders still value pre-sales as evidence of market appetite and as part of their exit security, many now treat them with caution — recognising that not all pre-sold units translate into completed transactions.
Rising mortgage rates, affordability pressures, and stricter buyer due diligence have increased the likelihood of fall-throughs and delayed completions. As a result, lenders have refined how they underwrite off-plan exposure, often requiring more conservative assumptions and detailed contingency plans.
For developers, understanding these shifts is crucial. Misjudging how lenders view pre-sales can lead to reduced leverage, slower approvals, or even rejection at credit committee stage.
At Willow Private Finance, we help developers and investors structure facilities that properly balance pre-sales and retained units, ensuring that lender confidence remains strong from first drawdown through to exit.
For more context on today’s lending environment, see our related insights: Development Finance in 2025: What’s Changed and What Lenders Want Now and Phased Development Finance in 2025: How Lenders View Multi-Stage Builds.
The UK property market in 2025 continues to show resilience but with significant variation by region and sector. Prime London schemes and purpose-built rental assets remain in demand, while secondary locations and speculative apartment builds face slower absorption and softer valuations.
In this environment, off-plan sales still play a key role in lender comfort — but they are no longer seen as a simple proxy for demand. Buyers are more cautious, mortgage approvals are slower, and developers increasingly find themselves re-negotiating contracts when completions coincide with tighter credit conditions.
Lenders have responded by stress-testing exit assumptions more rigorously. They now look not only at the headline number of pre-sold units but also the financial strength and mortgage readiness of those buyers. Some require re-verification of off-plan sales closer to completion, or discount the value of pre-sales entirely if deposits are small or buyers are overseas.
The result is a lending market that prizes certainty and liquidity. Developers must now prove that their exit plan can survive sales delays, buyer withdrawals, or shifting affordability criteria — and demonstrate credible fallback strategies should pre-sales not complete as expected.
In most development finance facilities, the lender’s ultimate exposure is tied to the project’s gross development value (GDV) at completion. Off-plan sales reduce that risk by effectively pre-securing a portion of the end value through exchange contracts and deposits.
Lenders use these commitments to justify higher leverage or more favourable pricing. A project with 40% of units pre-sold at strong values may qualify for a higher loan-to-cost ratio than one with no early buyers. However, in 2025, lenders are far more discerning about what qualifies as a reliable sale.
A pre-sale must now be legally binding, supported by a meaningful deposit, and demonstrably fundable by the purchaser. Many lenders only recognise sales backed by a minimum 10–15% deposit and will exclude buyers who have not passed full mortgage approval.
This shift means developers can no longer rely solely on marketing momentum to influence lending terms. They must present comprehensive buyer data — including proof of funds, buyer nationality, and mortgage readiness — as part of the credit pack. Willow Private Finance helps developers collate and structure this information in a way that aligns with lender expectations and mitigates perceived risk.
Several forces have converged to make lenders more conservative about off-plan exposure. First, the volatility in mortgage rates since 2023 has caused a surge in buyer withdrawals close to completion, particularly where mortgage offers expired during long construction periods.
Second, the regulatory environment has tightened. The Financial Conduct Authority now expects greater transparency around reservation deposits and buyer affordability, increasing the administrative burden on developers.
Third, overseas demand — once a cornerstone of off-plan success in prime London and regional cities — has softened amid currency shifts and new tax considerations. While international buyers remain active, their appetite for early-stage commitments has waned, and lenders are wary of perceived cross-border enforcement risks.
These factors have led to a subtle but important change in underwriting logic. Where lenders once treated exchanged contracts as “bankable” evidence of exit value, they now apply discount rates or completion probability factors. A lender might only credit 70% of pre-sold GDV toward their risk model, depending on buyer profile and contract structure.
Valuers play a central role in determining how much weight lenders give to off-plan sales. In 2025, most valuation instructions require the valuer to confirm both the level and quality of pre-sales, including deposit amounts, buyer demographics, and contract conditions.
Valuers are also instructed to comment on whether the agreed sale prices are sustainable under current market conditions. If comparable evidence suggests that values have softened since contracts were exchanged, the lender may apply a downward adjustment to GDV — even where contracts are legally binding.
This approach ensures lenders are not over-exposed if a significant number of buyers fail to complete. But it also means developers must manage buyer engagement actively. Regular communication, progress updates, and transparency help reduce fall-throughs and demonstrate to lenders that the sales pipeline is being carefully maintained.
When fall-throughs occur, lenders assess the developer’s liquidity position and contingency plan. Projects that include a clear re-sale or refinancing strategy — such as retaining unsold units for a rental exit — are viewed far more favourably than those dependent solely on a specific completion schedule.
The strongest developers in 2025 are those who anticipate and plan for variability in off-plan completions. Lenders increasingly expect to see evidence of such planning built into the funding structure itself.
For example, developers might agree to retain part of the facility in reserve to fund extended marketing periods or minor unit reconfigurations if sales slow. Others negotiate flexibility around repayment timing, allowing a short bridge-to-term facility at the end of construction to manage any sales lag.
Some lenders also support hybrid exit structures, combining partial sales with a refinance into a term loan or investment facility. This model, common in build-to-rent and mixed-tenure schemes, gives both developer and lender a predictable route to income while allowing more time to realise full sales value.
At Willow Private Finance, we often structure development facilities that include multiple exit options from the outset. This gives developers a stronger position during credit committee review and ensures that temporary market shifts do not compromise completion or refinancing.
For projects that rely heavily on overseas buyers, lenders pay close attention to currency risk and cross-border enforceability. In 2025, with sterling fluctuating against major currencies, lenders often discount the value of foreign-exchange-denominated deposits or require evidence that funds are held in UK accounts.
Some lenders even insist that developers hedge currency exposure to ensure pre-sale receipts maintain their sterling value. While this adds cost, it also reassures lenders that revenue streams will not erode before completion.
Equally, lenders now examine the legal framework governing off-plan contracts with overseas purchasers. They want clarity on jurisdiction, dispute resolution, and the developer’s ability to enforce completion if buyers default. For developers marketing to international audiences, these clauses have become an integral part of funding approval.
Developers seeking to secure funding on strong terms in 2025 should approach off-plan strategy as part of their financing plan, not just their marketing plan. That means balancing pre-sales with retained inventory, ensuring deposits are meaningful, and maintaining transparent buyer tracking systems.
Lenders increasingly value projects where developers can demonstrate sales discipline and resilience — not simply headline exchange figures. Regular valuation updates, evidence of diverse buyer profiles, and flexible exit structures all contribute to lender confidence.
Willow Private Finance often advises clients to present off-plan schedules with commentary on buyer quality, nationality, deposit size, and completion likelihood. This level of transparency not only accelerates approval but can also improve leverage or pricing outcomes.
Consider a 120-unit development in Manchester, with 50% of units sold off-plan at exchange. The developer approaches two lenders. The first offers 65% LTC based purely on headline sales; the second, working through Willow, offers 75% LTC after reviewing detailed buyer data, deposit evidence, and fall-through contingency planning.
Because the developer can demonstrate robust sales management and credible alternative exits, the lender’s credit team applies a higher weighting to pre-sold GDV. The result is stronger leverage, faster drawdown approval, and a lower contingency requirement — all achieved through structured transparency.
As rates stabilise and inflation eases, lenders may gradually soften their stance on pre-sales — but only for developers who can evidence proven delivery and professional buyer management.
We expect continued segmentation between institutional-grade lenders, who demand audited off-plan tracking and structured exits, and private lenders, who take a more relationship-driven approach. The best developers will tailor their approach to each lender’s appetite, using structured reporting to maintain trust and flexibility.
Off-plan risk is here to stay, but so are the opportunities. Developers who adapt early — by integrating pre-sale management, contingency planning, and financing strategy — will secure the most competitive funding terms in 2025’s cautious but opportunity-rich market.
Willow Private Finance works with specialist development lenders, private banks, and institutional funds across the UK to structure development finance that recognises the realities of today’s off-plan environment.
We understand how lenders assess pre-sales, what evidence they require, and how to present your exit plan to achieve maximum leverage without unnecessary conditions. Whether your scheme relies on overseas buyers, phased releases, or mixed-tenure exits, our team can position your funding proposal to meet lender expectations with clarity and confidence.
Q1: Do lenders still favour off-plan sales in 2025?
A: Yes, but they now place more emphasis on buyer quality, deposit size, and completion likelihood rather than headline sales numbers.
Q2: How much deposit do buyers need for their contracts to count?
A: Most lenders recognise deposits of 10–15% or more and require proof that buyers have secured or can obtain mortgage finance.
Q3: What happens if off-plan buyers pull out before completion?
A: Lenders expect developers to have contingency plans — such as rental strategies or short-term bridging — to manage sales delays.
Q4: Can overseas buyers affect lending terms?
A: Yes. Lenders may discount the value of foreign-exchange-denominated deposits or require additional proof of funds to offset currency risk.
Q5: How can Willow Private Finance help with off-plan-dependent projects?
A: We prepare funding applications that align with lender expectations, ensuring buyer data, exit plans, and contingency strategies are presented credibly.
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About the Author
Wesley Ranger is the Director of Willow Private Finance and has over 20 years of experience in property and development finance. He specialises in high-value and complex structures, advising developers across the UK and internationally on lender expectations, pre-sale management, and phased exit strategies. His insight helps clients secure optimal terms even in challenging market conditions.
Important Notice
This article is for general information purposes only and does not constitute personal financial advice. Development finance product availability, eligibility, and rates depend on your individual circumstances and may change at any time.
Always seek tailored advice before committing to any financial arrangement.
Willow Private Finance Ltd is authorised and regulated by the Financial Conduct Authority (FCA No. 588422). Registered in England and Wales.
