A fixed charge is a legal form of security granted by a borrower over a specific, identifiable asset, such as land or buildings. In UK property development finance, lenders use fixed charges to gain control over development land or completed units, ensuring that the asset cannot be sold or dealt with without their consent. Unlike floating charges, fixed charges attach immediately and restrict how the asset is used. Fixed charges give lenders stronger priority in the event of default or insolvency, forming a core part of most secured lending structures in the development sector.
Within the wider framework of Securities and Collateral, a fixed charge is typically the lender’s primary security over development land, investment property, or completed units, giving direct control over assets that underpin the loan. It is often contrasted with a Floating Charge, which generally covers changing business assets and allows greater operational flexibility until enforcement occurs. In property development transactions, the presence of a fixed charge can strengthen a lender’s security position and influence funding terms, particularly where investors or lenders are seeking a predictable repayment profile associated with structures such as Fixed Return with Priority.
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