Most senior development facilities are priced assuming the full construction period plus a short post-completion tail. The moment practical completion is signed off, you're paying for construction risk that no longer exists — and the longer you sit on that debt, the more money drips away unnecessarily.
That said, exit finance has its own costs (see the calculator). Switch too early and you waste an arrangement fee on a facility you barely use. Switch too late and you've burned months on 1%+ pm senior debt you could have swapped to 0.6% pm exit.
Signal 1 — Practical completion is imminent
The single most important trigger. If your contract administrator has signed off PC or is within 30 days of it, you have leverage. Dev exit lenders price aggressively on completed or near-completed schemes because construction risk has evaporated.
Practical completion isn't about the final snagging list — it's about whether the senior lender's construction-risk premium is still justified. It's almost never justified past PC day.
Signal 2 — Your senior facility's "tail" is expiring
Most senior dev loans include a post-completion sales-period tail — usually 3 to 9 months at the same rate, occasionally stepped up. Once you're within that window, two things are true: (a) your senior lender is starting to charge you for the privilege of staying on the facility past its intended purpose, and (b) if you miss the extended expiry you'll hit default interest rates that make dev exit look free.
If your tail expires in the next 3–4 months and your sales are tracking below the senior lender's expectations, start the exit conversation immediately.
Signal 3 — Sales velocity is slower than projected
Anyone who's sold more than a dozen UK residential units knows: the initial marketing burst always outperforms the steady state. If you're three months post-launch and have sold fewer than 30% of units, extrapolate forward — your total sales period is likely 12–18 months, not 6–8.
That's the range where dev exit finance is cheapest in absolute cost terms versus the senior tail, and cheaper than a term refinance under about 12 months. See chapter 3 on covenants to understand how to structure the facility so slow sales don't trigger default interest.
Signal 4 — Your senior lender has become difficult
Not all senior relationships end well. If your lender has flagged covenant concerns, is pushing for additional equity, or is clearly pricing in an unfavourable valuation, exit finance is a release valve. A fresh lender with a clean site + current comparables often takes a different view.
The two signals that mean stay put
- Units are moving faster than modelled. If you're likely to be out of senior debt within 4 months, the arrangement fee on a dev exit facility (~£45k on a £3m loan) is unlikely to pay back. Stay on the senior, negotiate an extension if needed, and repay from sales.
- The senior lender has already agreed favourable extension terms. Occasionally your senior will match dev-exit-style pricing to avoid refi friction. If they've offered it, take it — you avoid legal costs, valuation, and the arrangement fee.
The timeline, simplified
Here's how the best UK developers plan the switch:
- PC minus 90 days. Start soft conversations with 2–3 potential exit lenders. No commitment, no valuation, just indicative terms.
- PC minus 60 days. Engage a broker if you haven't already. Get a written indicative offer from at least two lenders.
- PC minus 30 days. Pick the lender, instruct solicitors, book valuation.
- PC day. Draw the facility as soon as PC is signed, repay senior same day.
That timeline keeps your cost of capital from climbing at the exact moment your scheme is least able to justify it.
Next: how to pick among dev exit lenders — who actually does the product, and how they decide.