Author: Mark Harrison.
Mark is the Managing Director of Breeze Capital and has over 30 years experience in bridging loans & development finance. You can check out his LinkedIn profile here.
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Understanding Fractional Deposits in Off-Plan Property Sales – and How Bridging Finance Can Support Developers
In cities like Liverpool, where off-plan residential developments have surged in recent years, fractional deposit models have become a common feature of the sales process. For property investors, these staged payments make purchasing more accessible. But for developers, they can create cashflow gaps that need bridging, sometimes literally.
What Are Fractional Deposits?
A fractional deposit is a staged payment model used by developers selling off-plan properties. Rather than requiring the full purchase price upfront, buyers pay a percentage of the total price in agreed stages during construction.
A typical structure might look like this for a £150,000 apartment in Liverpool:
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£5,000 reservation fee
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10% on exchange of contracts (£15,000)
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20% during construction (£30,000): often split into two 10% payments
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70% on completion (£105,000): funded via mortgage, cash or other finance
This structure offers buyers more time to fund their investment and gives developers early-stage capital to begin or continue construction. However, the model relies on continuous sales and consistent investor follow-through, which doesn’t always happen.
Why Developers Use Fractional Deposits
Fractional deposits allow developers to de-risk projects by:
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Securing buyer commitment earlier
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Reducing reliance on full development funding
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Using staged funds to cover key milestones (groundworks, structure, fit-out)
But when sales slow or investors delay payments, developers can face short-term funding gaps between construction spend and incoming deposits.
How Bridging Finance Can Help Developers
This is where bridging finance becomes a strategic solution. A developer may use a bridging loan to cover cashflow shortfalls created by a fractional sales model. For example:
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If a developer has sold 40% of a scheme with only 10% deposits paid so far
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But needs funds to reach the next build stage (e.g., roof on or show flat fit-out)
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A bridging facility can unlock capital quickly, secured against site value and existing contracts
At Breeze Capital, we regularly support experienced developers in these scenarios, especially in regions like Liverpool, where off-plan fractional models are widespread. Our funding can be used for:
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Construction bridging (when sales funds aren’t flowing quickly enough)
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Top-up equity release (against unsold or partially sold units)
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Re-bridging stalled schemes to re-energise investor confidence
Risk Considerations
Developers using fractional deposits should plan for scenarios where buyers don’t proceed to completion or payment delays occur. Lenders like Breeze Capital assess not just the build stage but also the legal structure of the fractional model, reservation quality and overall demand in the local market.
Bridging loans, when structured properly, can de-risk these projects and maintain construction momentum while longer-term finance or sales proceeds catch up.
Talk to Breeze Capital
If you’re a developer working with fractional deposits or a broker representing one, speak to Breeze Capital today.
We understand the Liverpool market, and we provide fast, flexible bridging loans to keep your project on track.
For more information on how Breeze Capital can help you with your property requirements, please call us on 01244 565095
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Or click here to go to our main page: www.breezecapital.co.uk