A turnkey purchase loan is a senior debt facility used to acquire fully completed properties that are ready for immediate use, sale, or letting. In the UK property development finance space, this loan type is common in build-to-rent (BTR), private rented sector (PRS), and institutional forward-purchase deals. It allows developers or investors to secure income-generating assets or to reposition a completed property without engaging in construction. Loan terms focus on asset yield, tenant profile, and market value, rather than construction risk or cost-to-complete.
Within the capital stack, a turnkey purchase loan sits as a refined subset of an Acquisition Loan, distinguished by its focus on stabilised or near stabilised assets with immediate income potential. Unlike funding structures that carry development or lease-up exposure, underwriting here is driven by contracted rental income, covenant strength, and valuation metrics at completion. It is often assessed alongside an Asset Purchase Loan, although turnkey facilities tend to reflect tighter margins due to reduced execution risk. While construction is complete, residual obligations tied to the original Construction Contractor may still influence lender due diligence, particularly around defects liability and warranties.
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