The specialist packager has estimated that £20.4m is needlessly spent on interest each year across the UK’s entire development portfolio, which totalled £5.4bn in loans in 2016.

The research explained that the difference in interest rate between a standard development finance loan and an exit loan is typically 0.5% per month.

However, it claimed that, on average, developers remain on the wrong finance deal for four months.

Mark Dyason, managing director of Thistle Finance (pictured above), said: “Developers are wasting millions on interest each year because they are forgetting to refinance off expensive development finance deals once the riskier stages of their schemes are complete.

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“Worse still, they can sometimes end up on a punitive penalty rate.”

The research claimed that around one in 10 developers are faced with penalty rates of around 1.5% per month more than an exit loan product during this four-month period.

Thistle Finance estimated that approximately 60% of UK developments are built for sale and therefore vulnerable in this situation.

“When buildings are already standing, that’s the point at which you can flip on to more competitive exit loans,” Mark added.

“Lenders only need to charge higher rates of interest while there’s a chance the scheme won’t be finished.

“Depending on the size of scheme, the savings available can amount to tens of thousands of pounds, which represents all-important cash flow or capital to be directed towards future projects.”