How to Get Cheap UK Property Loans

Investing in property is often an expensive undertaking. The most common costs go to hiring an architect, acquiring the land, buying building materials, paying a construction contractor, and interior designers among others. Therefore, getting affordable finance is an important and often mandatory thing if you are investing in UK property. In this article, we will look at the common UK property loans that you can use when you want to invest in property.

Did you know that building costs in the UK are the second highest in the world? Also, these costs are rising by more than 5% every year.

Types of Property Loans in the UK

There are several types of property loans that you can borrow in the United Kingdom. Some of these types are:

  • High street loans. These are the average mortgages that are offered by most retail banks in the UK. These loans are divided into fixed mortgages or variable mortgages.
  • Buy-to-let mortgage. This is a mortgage given to a borrower who wants to buy a property and rent it out.
  • Commercial mortgage. This is similar to high street loans, with the main difference being that commercial mortgage is given to houses that are classified as commercial.
  • Holiday-let mortgage. This is a mortgage that is given to help in full value or to develop a property that is then rented out to tourists for a short period.
  • Residential bridge loan. These are short term interest only loans that help developers deal with urgent issues during residential property development.
  • Commercial bridge loan. These are short-term interest only loans similar to the residential bridge loans. The only difference is that they are for commercial properties.
  • Development finance. This is a type of loan that is given to property developers to develop their projects. It can be used for residential and commercial developments.

Cost of Building in the UK

A common question we are often asked is on the average cost of building a project in the UK. The answer to this is that it depends. It depends on the type of property project that you are running, the location, and the scale of the project. Big projects in a city like London will cost millions of pounds. Still, as we mentioned above, on average, the UK has some of the highest building costs in the world. It competes for this crown with cities like New York, Hong Kong, and Geneva. On average, the cost of building a residential detached house is £1,950 per 200m2 while the cost of building an apartment block is about £1,640 per 7000m2.

How to Get UK Property Loans

As we have seen above, there are several types of property loans. Also, we have seen that the average cost of building or investing in UK property is relatively high. In this section, we will look at the various places to get property loans in the UK.

Specialized Lenders

The first option to get quality property loans in the UK is using specialized lending companies. They are not banks. Instead, they are companies that specialize on funding various types of projects in the UK. A good example of a specialized lender is WestOne, which provides bridging loans, second mortgage, development, and buy-to-let loans among others. The company lends between £50k and £2 million for between 5 years and 30 years. Other examples of specialized lenders in the UK are LendInvest, Together, Shawbrook, and Octane among others. The advantage of using these specialized lenders is that their business revolves about this type of lending. They also have the knowledge and expertise that you can use when building your UK property.

UK Banks

Another option you can use to get property loans is the normal banks. The UK has more than 300 banks that offer various types of loans. Most of these banks offer different types of loans such as personal loans, business loans and development loans. We recommend that you visit your local bank and ask about whether it offers property loans.

Building Societies

The UK has about 45 building societies. A building society in the UK is similar to credit unions in the US. These are organizations that receive deposits and offer financing to their members. They are known for the low interest rates that they offer. As you try and find a good property lender in the UK, you can consider doing some research on local building societies. Some of the most popular societies are York Building Society, Beverly Building Society, and Cambridge Building Society among others.

UK Peer to Peer Lenders

Another option is to use peer to peer loans in the UK. P2P platforms use a simple model. As a lender, you talk to them about your project, they do a risk analysis of the project, and then post the project in their website. After this, retail and pre-approved investors invest in the property. Finally, you will start paying the loans to these investors through the platform. There are several property crowdfunding companies in the UK such as EstateGuru and Assetz Capital. The benefits of using these platforms are that they are easy to use, have a higher credit limit, quick decision making, and flexible terms.

Crypto Backed Loans

There is a growing recognition of cryptocurrencies such as Bitcoin as assets. As such, Bitcoin holders can use them as collateral to acquire loans for different purposes, including property development. In this case, you will deposit the agreed amount of cryptos with a platform that offers crypto backed loans in the UK such as CoinLoan. You will receives your cryptocurrency back after making the final repayment.


Investing in property is a good thing because of the potential return or recurring return you can get. However, the process of achieving all this, particularly in the UK, is long and expensive. As an investor, you can use the options we have mentioned above to get funding. But before you do, it is important that you do your research to an option that charges low interest rates.

FiFi Finance is a financial website. We are an online resource for everyone who wants to learn more about financial matters. We provide information on topics such as bank accounts, investments, loans, and personal financial management. Our mission is clear; we intend to help to improve financial literacy, by making finances work for everyone. Your feedback is appreciated. Read more about us.