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
Embedding AI tools into architectural education
Beyond the render: LMU share how student led research is shaping the future of visualisation workflows.
Why document control still fails UK construction projects
A Chartered Quantity Surveyor explains what needs to change and how.
New planning reforms and Warm Homes Bill
Take centre stage at UK Construction Week London.
A brief run down of changes intentions from April in an onwards.
Reslating an ancient water mill
A rare opportunity to record, study and repair early vernacular roofs.
CIOB Apprentice of the Year 2025/26
Construction apprentice from Lincoln Mia Owen wins this years title.
Insulation solutions with less waste for a circular economy
Rob Firman, Technical and Specification Manager, Polyfoam XPS explains.
Recycled waste plastic in construction
Hierarchy, prevention to disposal, plastic types and approaches.
UK Net Zero Carbon Buildings Standard V1 published
Free-to-access technical standard to enable robust proof of a decarbonising built environment.
Prostate Cancer Awareness Month
Why talking about prostate cancer matters in construction.
The Architectural Technology podcast: Where it's AT
Catch up for free, subscribe and share with your network.
The Association of Consultant Architects recap
A reintroduction and recap of ACA President; Patrick Inglis' Autumn update.
The Home Energy Model and its wrappers
From SAP to HEM, EPC for MEES and FHS assessment wrappers.
Future Homes Standard Essentials launched
Future Homes Hub launches new campaign to help sector prepare for the implementation of new building standards.
Building Safety recap February, 2026
Our regular run-down of key building safety related events of the month.
Planning reform: draft NPPF and industry responses.
Last chance to comment on proposed changes to the NPPF.
A Regency palace of colour and sensation. Book review.