Buyer-funded development
Buyer-funded development, also known as investor-led fractional sales, is a model of financing property development that typically involves using deposits from individual buyers to fund apartment buildings. Buyers of the apartments purchase off-plan, paying deposits of up to 80%.
This model of financing has become more common since the 2008 financial crisis as it has been harder for developers to fund schemes through traditional borrowing from banks or institutional lenders. It differs from more conventional models of off-plan development where buyers’ deposits (usually 10%) are held in secure escrow accounts and released only on project completion.
It has been subject to wide criticism as a risky form of investment, with the Solicitors’ Regulation Authority warning that buyers may be ‘unwittingly financing high-risk or fraudulent property development’. Since the large deposit is paid up-front, it can be spent on project costs and fees before any construction work actually begins, and when construction does begin it can be without the commitment of funding necessary to enable it to be completed. There is also no safety net if the developer becomes insolvent, funds run out, or if the developer fails to deliver the project as proposed.
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
Homes England creates largest housing-led site in the North
Successful, 34 hectare land acquisition with the residential allocation now completed.
Scottish apprenticeship training proposals
General support although better accountability and transparency is sought.
The history of building regulations
A story of belated action in response to crisis.
Moisture, fire safety and emerging trends in living walls
How wet is your wall?
Current policy explained and newly published consultation by the UK and Welsh Governments.
British architecture 1919–39. Book review.
Conservation of listed prefabs in Moseley.
Energy industry calls for urgent reform.
Heritage staff wellbeing at work survey.
A five minute introduction.
50th Golden anniversary ECA Edmundson apprentice award
Showcasing the very best electrotechnical and engineering services for half a century.
Welsh government consults on HRBs and reg changes
Seeking feedback on a new regulatory regime and a broad range of issues.
CIOB Client Guide (2nd edition) March 2025
Free download covering statutory dutyholder roles under the Building Safety Act and much more.
Minister quizzed, as responsibility transfers to MHCLG and BSR publishes new building control guidance.
UK environmental regulations reform 2025
Amid wider new approaches to ensure regulators and regulation support growth.
BSRIA Statutory Compliance Inspection Checklist
BG80/2025 now significantly updated to include requirements related to important changes in legislation.