Sector completions dropped sharply in the year's first quarter
Funding 365 has revised pricing on its Ground Up Development product weeks after a change in ownership and a new £300 million institutional funding line, at a point when UK development finance completions have declined and rival lenders have also moved on rates.
Global alternative investment manager Balbec Capital acquired Funding 365 in June 2026, taking on the lender's origination platform, existing loan portfolio and newly originated loans. Michael Strange and Paul Weitzkorn have remained in post to lead day-to-day operations under the new ownership.
New funding line secured
Days later, Funding 365 confirmed a separate £300 million funding line with a global investment bank, intended to increase lending capacity across its bridging, refurbishment, development and specialist buy-to-let ranges.
The facility sits alongside Funding 365's existing institutional lines rather than replacing them. It arrived as institutional funders have grown more selective about which platforms they support: the Interpath and BDLA Bridging Market Survey 2026 found that only 35% of lenders now forecast origination growth, down from 75% in the previous survey, with 46% expecting institutional funding appetite to decline over the coming year.
Sector completions decline
Separate data from the Bridging & Development Lenders Association shows completions across bridging and development finance fell to £1.8 billion in Q1 2026, down from £2.5 billion in Q4 2025. Applications over the same period dropped from £11.7 billion to £9.9 billion, and total lender loan books fell from £13.4 billion to £11.5 billion.
Funding 365's Ground Up Development product now carries rolled interest rates from 0.74% per month, equivalent to circa 8.8% per annum, for 12-month loans up to 60% LTV net day one.
Borrowers seeking higher leverage can access 0.79% per month up to 65% LTV net day one, or 0.84% per month up to 70% LTV net day one, with an 18-month term option also available.
Loan sizing and lending limits
Funding 365's product is aimed at loans between £250,000 and £3 million, positioning it for smaller residential developments across England and Wales. Works are funded in arrears, with lending available up to 65% LTGDV gross and 85% LTC net.
That bracket falls within a segment of the market that has faced tighter conditions over the past 18 months. According to Mark Roberts, relationship director at Assetz Capital, demand for bridging and development finance among SME housebuilders has held up but has changed in nature, with lenders now requiring more consistent information on build costs, drawdowns and exit routes before committing to a scheme.
Funding 365 will consider applications from borrowers across all levels of experience, including those with adverse credit and foreign nationals who hold an established UK credit record. A 2% arrangement fee and a 1% exit fee apply, with legal, valuation and monitoring fees charged separately at market rate.
Underwriting turnaround
Mike Strange, director at Funding 365, said: "Recent improvements to our funding have allowed us to significantly enhance our ground up development offering. We believe that our new low interest rates and rolled interest structure when paired with our award-winning service will provide an extremely compelling proposition to brokers and borrowers alike. For credit backed terms within one hour, we encourage everyone to contact our underwriting team directly on 0800 689 0650 or [email protected]."
The one-hour turnaround referenced by Strange reflects Funding 365's wider underwriting structure, under which mandated underwriters are authorised to deliver bespoke terms within an hour of receiving full case details, with the same underwriter managing a loan through to completion.
This model has been applied across the lender's bridging book, including a stepped rate facility completed for a Nottinghamshire developer at a starting rate of 0.49% per month. It comes as underwriting standards across the sector have tightened in 2026, with lenders increasingly requiring evidence-based exit planning, such as comparable sales data or confirmed rental income projections, rather than a stated intention to repay.
