UTB backs young development company

United Trust Bank was approached by a Devon based development company which sought funding to complete a nine unit residential scheme on a  brownfield site in a town close to Dartmoor National Park.

The development company, which is owned and managed by two brothers, had set up a limited liability partnership between themselves and a private investor for the purpose of a joint venture developing this one site. The brothers and their investor had acquired the site and now needed to borrow circa £970k to complete the build. Luke Denno started his own property renovation and development company in 2003 and his brother Justin later joined him in the business as Finance Director. This company has over 12 years of experience building and renovating properties in the South West for various clients and would be employed as main contractor on the build. This would be the first project where Luke and Justin were the developers in their own right.

Jonathan Nail, Property Development Director at UTB, was able to look at the company’s previous work which most recently included a development of 8 new flats in a very tight town centre site which required meticulous planning. Comfortable that the brothers were capable of delivering their own project to a high standard and within budget, Jonathan took the proposal to the Bank’s Credit Committee including evidence of strong demand for the proposed properties in the locality and at the target prices suggested. [color_quote]The area has seen steady house price growth and the town’s proximity to Exeter, where prices are substantially higher, makes it a popular choice for first time buyers and young families. The mix of two bedroom terraced and 3 bedroom detached homes was suitable for the location and the buyers the developers were aiming to attract. The Bank subsequently agreed to provide an £970k facility on the site which had an estimated GDV of just under £1.7m.[/color_quote]

The build proceeded largely as planned with all of the units completed by September 2016 and the majority of them sold during the construction phase. During the build the brothers needed to make a variation to the finance facility in order to make a bond payment to the local authority on account of them adopting responsibility for the access road. They were impressed with UTB’s credit process where the variation was quickly assessed and approved. [pull_quote]Justin Denno, Finance Director of Belfield Developments Ltd, commented: “It has been a pleasure working with UTB and the development finance team have been helpful, flexible, practical and supportive. The lack of red tape has been refreshing.”[/pull_quote] Belfield Developments are soon to move on to their next project and have approached United Trust Bank to consider providing the funding they need.