Debt to capital ratio is a key leverage metric in UK property development finance that compares total debt to overall capital invested in a project. It is calculated by dividing all borrowed funds by the sum of debt and equity capital. This ratio helps determine how much of the development’s capital stack consists of loans, reflecting financial risk and funding structure. Developers and lenders use this figure to gauge reliance on external financing versus equity investment within a property development scheme.
This sits beneath Leverage Ratios, introducing a more specific variant of the measure without changing its core interpretation. It is commonly considered alongside Senior Debt to Total Capital, as both are closely related measures used to assess similar aspects of performance or risk. In funding terms, Debt to Capital is most commonly encountered in connection with 1st Charge + Top-Up in Same Loan within the property development capital stack.
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