United Trust Bank was approached by a broker whose client was a sizeable house building contractor with particular emphasis on the provision of social housing. They had recently employed a team of people with private sector residential development experience and were looking to undertake their first private sector development.
The project comprised 68 residential units, mainly houses with a small number of flats. However only 16 houses were for private sale, the others being set aside for affordable rent and shared ownership.
The land for the affordable rent and shared ownership was sold on to a housing association which entered into a build contract with our borrower. The borrower was left with the land for the private housing and roads etc.
We were able to provide a facility of £3m (50%) of GDV to partially fund the acquisition of the private land and develop these houses. The due diligence was particularly complex as we had to ensure all costs were covered by a combination of the Housing Association build contract and our funding. It was also important to ensure that the build programme for the social housing would not delay the sale of the private housing or adversely impact on our customer’s ability to discharge planning conditions.
Loan £3m GDV £6m.