New challenger bank Masthaven has launched its new development finance offering.

The bank will lend up to 50% on purchases, up to 100% of build costs and up to 60% of the gross development value including rolled up interest.

The products have no redemption fees or penalties – and the bank said they will be offered with lower interest rates and the opportunity to roll-up interest.

Its team of specialists will also lend on refurbishments where there is structural work or change in either use or number of units required.

James Bloom, managing director of the development finance division, said: “The UK has a critical housing shortage and we are proud to offer new development finance products to support SME housebuilders to help address the UK’s housing gap.

“As we become a bank, brokers and developers can be reassured that while they will continue to receive the same exceptional service they expect from Masthaven, they will now benefit from more favourable lending rates.”

The products are for England and Wales, though Scotland is considered in exceptional circumstances, and the bank is offering loans between £150,000 and £2m in most cases.

The loans have terms of up to 12 months for regulated loans and 18 months for non-regulated.