Brotherton advises UTB on £6m funding for beachside hotel conversion
Brotherton Real Estate advised on the case which was put forward by developers Harrington Homes.
Work has already begun on the site next to Harlyn Bay beach which has seen the former Harlyn Inn Hotel demolished to be replaced by a three-storey development.
The finished building will consist of 14 two and three-bedroom apartments and ground floor commercial space.
The projected has an estimated gross development value of £11m when finished.
Brotherton Real Estate introduced Harrington Homes to UTB in October with purchase completion due to take place in early November.
UTB said that although Harrington Homes was a new customer the firm had extensive development experience and a strong track record around the South West.
The lender’s credit committee agreed to provide the £6.18m required to cover the balance of the site purchase, construction costs, professional fees other obligations.
An extended repayment term was agreed to provide Harrington Homes with greater flexibility should the pandemic create disruption to the construction timetable.
Demolition works were underway within two weeks of the completion of the site acquisition and the first apartments should be released for sale around Easter 2021.
Robert Kleinman, chief finance officer of Brotherton Real Estate, said: “Mark Pannell and the United Trust Bank team pulled out all the stops to provide a quick decision on this deal and have the funds available within around six weeks of our first conversations.
“I’m very pleased to get another competitive funding deal with UTB over the line and look forward to working together on future deals.”
Mark Pannell, senior manager – property development at UTB added: “Harrington Homes have established a strong reputation for delivering high quality developments and I’m delighted that UTB will be providing the funding to create these superb homes in a stunning location.
“We had to move quickly on this deal and Brotherton’s involvement was crucial to us getting all the information we needed when we needed it.
“With around 40 buyers already showing interest in the apartments, I’m sure this will be another successful development for Harrington Homes and the bank.”
Crystal Specialist Finance and Loans Warehouse unveil new hires
Adam Tauber (pictured) has joined Crystal to head up its development finance
He joins from Affirmative Finance where he was a relationship manager, and was previously a business development manager at Together.
Tauber said: “The development finance market in the UK continues to perform well, and Crystal has a well-established position in the sector.
“I am looking forward to building on the foundations they have laid and raising the bar still further, working closely with brokers and lenders to deliver exceptional results.”
Jo Breeden, managing director of CSF, added: “Housing is clearly a priority for this government, therefore demand from developers will only grow in 2021 and beyond.
“Adam’s knowledge and previous mandated experience within lending environments will be crucial to support our brokers and help educate those new to this area of finance.”
Loans Warehouse adds to bridging team
Greg Chase has joined Loans Warehouse’s short term finance team as senior bridging adviser.
He will be tasked with further expanding the specialist broker’s bridging proposition – an area that Loans Warehouse has focused on in recent months.
Chase was previously a broker, specialising in commercial and bridging finance, with the Commercial Finance Network.
He has also held sales and underwriting roles at Enterprise Finance, The Loans Engine and Prestige Finance.
Matt Tristram, co-founder of Loans Warehouse, said: “We are delighted to welcome Greg to Loans Warehouse. While some firms have found themselves having to reduce headcount over the past months we have been expanding.
“The appointment of Greg is a further commitment to improving our bridging finance proposition and comes in advance of a number of key new additions to our bridging finance panel. Greg will be a key figure over the next 12 months within our bridging team.”
Chase added: “I am pleased to be joining Loans Warehouse and look forward to working with the team. The coming months will see strong demand for bridging finance and Loans Warehouse is well placed to help service those needs.
“I look forward to getting started.”
No VAT cut for building refurbishment – Treasury
A lower VAT rate of five per cent applies to these situations already and Treasury dismissed the idea of cutting this to zero.
Responding to a written question, financial secretary to the Treasury Jesse Norman said: “The government already maintains a reduced rate of VAT at five per cent, subject to certain conditions, for residential renovations.
“Introducing a zero rate of VAT would come at a significant cost to the Exchequer, estimated at about £4bn per year, which would have to be balanced by a reduction in public spending, higher borrowing or increased taxation elsewhere.
“While the government keeps all taxes under review, there are no plans to change the VAT treatment of the repair and renovation of buildings.”
Conservative MP for Wycombe Steven Baker had asked the Treasury to assess the impact of reducing the VAT rate on building refurbishment works to zero.
BFS completes £2.5m re-development deal
The lender is providing the loan to Starship Group to finance the acquisition of the land and all associated build costs.
It is the fifth team the pair have worked together, with plans secured to demolish the former surgery in Heswall, Wirral and replace it with nine apartments (pictured).
It is estimated the development will be worth around £3.1m once completed, which is expected to be in the spring.
BFS managing director Steve Barber said: “We have completed a number of deals with this client in the past and have huge confidence in their knowledge, understanding and capabilities.
“We were able to take an independent view on their borrowing request and have agreed to finance the entire deal.
“The site is in a great location, very close to the town centre and the apartments are designed to a particularly high specification offering strong returns on investment.”
A Starship Group spokesperson added: “We have built a solid working relationship with BFS over many years. We regard them as our partner and an extension of the wider team.
“We collaborate with them at the very beginning and value their insight and input. They offer sound advice and present viable solutions to the most complex of financial challenges.
“This is a great scheme and we now have all the foundations in place to get things moving in terms of construction in the weeks ahead.”
BFS has also added Anne Gullon to its sales team as she takes on the role of business development manager in Yorkshire and the North East.
Gullon has more than 20 years’ experience in the industry working in business development roles for lenders and finance brokerages.
“A well-known figure across both regions, Anne will introduce the firm to existing contacts while strengthening the brand amongst new potential clients,” BFS said.
Redwood Bank appoints BDM from Together
Mann (pictured) has more than 23 years’ experience in the industry and was most recently corporate relationship director at Together, where she been since April 2019.
She has previously worked for Santander and was a manager of client relations at the Royal Bank of Scotland during her 18 years working for high street banks.
Gary Wilkinson, CEO and co-founder of Redwood Bank, said: “Sonia’s track record with previous banks is impressive. She has proven she’s more than capable of delivering fantastic customer service.
“In order to meet increased demand, we are keen to recruit new BDMs who have experience in building, and then managing strong relationships with, a portfolio of commercial clients. When we met Sonia, she fitted the bill perfectly.
“Sonia’s appointment also further demonstrates our commitment to the Women in Finance Charter, which encourages financial services to provide a balanced workforce across gender.
“We’re very passionate about accelerating gender equality and we feel we’re certainly moving in the right direction when it comes to further diversifying the make-up of our staff workforce,” he added.
Development lender Silbury Finance launched with £500m target for 2021
Matthew Pritchard, former head of European real estate debt at Man Group, and Gavin Eustace, former head of residential development at Octopus Real Estate have co-founded the firm alongside Oaktree.
The firm has ambitious targets to reach half a billion pounds of lending in 2021 and up to £3bn of lending over the next six years.
It will be focusing on loans in the £10m to £150m range with a loan to value (LTV) of between 60 and 70 per cent.
Silbury said there was growing borrower appetite to partner with experienced property lending professionals to access flexible bespoke loans.
“Credit supply in the segments targeted is constrained in part due to the decreased capacity of UK clearing banks to lend to certain real estate sectors,” it added.
Pritchard (pictured right) and Eustace (pictured left) have more than 40 years combined real estate lending experience and have originated more than £3bn of loans.
Pritchard spent six years at Man Group before joining Oaktree as a senior adviser while Eustace was responsible for over £1bn of lending during his time at Octopus.
High street and alternative lenders retrenching
Silbury Finance founding partner Matthew Pritchard said: “Middle-market residential developers continue to be hugely underserved by the lending markets, and we expect the current uncertainty to only exacerbate this trend further.
“Swathes of UK lenders, comprising both the high street banks and alternative lenders, have retrenched due to uncertainty generated by the Covid-19 pandemic and are committed to managing their current loan books. Large debt funds continue to seek the higher returns available from the large single ticket loans.
Eustace added: “The UK residential sector, which was already benefitting from a number of favourable structural trends, has further demonstrated its defensive and countercyclical characteristics during the pandemic.
“Against a structural backdrop of undersupply of residential real estate in our target markets, the case for debt financing remains strong and we look forward to closing on our near-term pipeline of opportunities, employing a prudent and disciplined approach to lending.”
Oaktree managing director Pablo Velez said: “We view the challenging economic backdrop as a compelling entry point to the sector and plan to take full advantage of the lack of a legacy book to focus on expanding quickly.
“UK real estate, in particular senior secured lending collateralized by residential developments, offers an attractive combination of risk and returns, and we expect this to continue for the foreseeable future.”
Pivot relaunches new business offering and gains £15m investment
It has also received a £15m funding line from Quilam Capital which it will use to expand its development finance business.
The new funding line will be used to underwrite unregulated bridging loans and build out the lender’s bridging and development finance offering, Pivot said.
There is also a specific capital contribution being made by Quilam to enable the business to grow its operating model and specifically its data analysis tools, it added.
Pivot launched in 2012 and has provided more than £200m in funding for property developments throughout England & Wales.
In 2018 it announced a £50m funding line with Shawbrook Bank which it has since expanded on and the Quilam cash will support that senior facility.
Re-engaging with brokers
Pivot head of business development Vishal Dixit said: “We are excited to re-engage with our intermediary partners and customers to find the right solutions to their lending needs.
“With strong backers who believe in our offering, we can continue to provide competitive bridging products secured against residential and commercial properties and can leverage our deep development experience to build out this offering, providing a variety of competitive ground up and refurbishment products.”
CEO Shahil Kotecha (pictured) added: “The affiliation with Quilam is more than a typical lender-borrower relationship and while completing the transaction during lockdown had its challenges, the synergies between the organisations and management teams were harnessed.
“This partnership approach, and continued support from Shawbrook, will be vital in growing the Pivot business in 2021 and beyond.”
Quilam Capital partner Marc Sefton said: “We have known the management team for a while and have been particularly impressed by how Pivot underwrites transactions, using tools that we haven’t seen across the market.
“The result has been a strong performance of its existing loan book and we will be working with the team to build on this solid foundation and accelerate growth materially in 2021 and beyond.”
No Help to Buy extension for builders struggling to meet completion deadline
The previous version of the Help to Buy scheme closed to new applicants last month, with a revised version opening in its place the next day.
Builders have already been given one extension to the completion deadline for the previous scheme as a result of disruption by the coronavirus, with the deadline moving from 31 December 2020 to 28 February 2021.
However, Labour MP for Liverpool Wavertree Paula Barker asked if a further extension would be granted “to enable smaller developers to obtain materials and meet their obligations to buyers”.
Housing minister Christopher Pincher noted that the government recognised there had been disruption hence the two-month extension for building completions deadline with the legal completion deadline for the purchase remaining 31 March 2021.
“However, the government also announced some additional flexibility to protect existing reservations made before 30 June 2020,” he said.
“These sales, by agreement with Homes England, must reach practical completion by 30 April 2021 and legal completion no later than 31 May 2021.”
He added: “There are no plans to extend the current Help to Buy scheme beyond 31 March 2021 and a new two-year Help to Buy Equity Loan scheme for first time buyers commences on 1 April 2021.”
Paragon and Southern Grove reveal developments worth £26m providing 106 homes
Paragon’s provided the loan for the first phase of The Gate development in Loughborough (pictured) and has now followed up to fund the second phase of the project.
Mark Horsnall, director at Horsnall Holdings, said: “The support from Paragon has enabled more much-needed housing to be developed in the Loughborough area.
“We have worked closely with Paragon for a number of years now on projects of varying sizes. The whole team has a great understanding of the industry and has always been keen to assist us with funding.
“Paragon’s continued support has helped us to grow our business significantly over the last few years. Monthly valuations and draw down are simple, hassle free and always paid within a few days of submission.”
Simon Dekker, relationship director at Paragon, said: “It is great to be able to continue our relationship with Horsnall and support the business with yet another scheme.
“Over the past few months, it has been our priority to support both new-to-bank and existing clients, so we are pleased that we are able to continue our relationship with the business through assisting with this development and those prior.”
Southern Grove opens Kent housing development
Meanwhile, Southern Grove has revealed an £18m housing development in Kent that will provide 42 homes consisting of semi-detached and detached family homes, as well as 12 apartments.
The Willows is located off Thanet Way, which is between Whitstable and Herne Bay, and has been designed by On Architecture in Canterbury.
It is adjacent to another larger housing development, the 300-home Grasmere Gardens, which is part of a wider scheme to provide housing in the area.
The Willows is the second scheme announced by Southern Grove this year, after the company revealed plans to create a £7m development of mews houses on Powys Lane in Enfield, north London.
Tom Slingsby, CEO of Southern Grove, said this was the kind of location that would benefit from a rise in demand for larger homes outside of London.
“Covid-19 has already been credited with fundamentally altering buyers’ working lifestyles and their property priorities. These shifts will have the power to improve local economies across the Home Counties.”
He added: “At the same time, areas like this will need to keep up with demand in order to moderate house price increases but we know local authorities won’t just be focused on the numbers.
“Planning departments are going to be keeping an eagle eye on the quality as well as the numbers of new homes.”
Brexit deal came too late for many builders – FMB
The trade body said finally securing a deal “brings reassurance to the construction industry” but noted for some it was already too late.
It also warned that the vast majority of the industry was already seeing higher costs and supply chain delays.
FMB chief executive Brian Berry said: “After the toughest of years, Britain’s builders will welcome the certainty that this deal appears to offer.
“Unfortunately, however, the deal will have come too late for many already feeling the effects of prolonged indecision.”
Berry added: “Nine in ten builders already face risings costs due to supply chain disruptions and higher product demand.
“We will wait to digest the detail, but this trade deal must deliver for builders by removing the barriers in their path to building back better and greener, be those access to products or skilled labour.”