District & County Investments (DCI) has provided £2.3m in development finance for the conversion of Stansfield Mill near Sowerby Bridge, West Yorkshire, into 17 residential apartments. The facility was structured to include pre-agreed exit financing terms at origination, eliminating the need for separate refinancing upon completion.
The dual-phase structure combined development funding with a transition to lower-cost exit finance once practical completion was achieved. According to DCI, this approach provided the borrower with cost certainty throughout the project and removed refinancing risk at the completion stage.
Structure and execution
Rather than treating development and exit finance as separate transactions, DCI integrated the transition mechanism into the original facility. The funding costs were designed to decrease as development risk reduced through the build phase.
“The funding was designed to transition to a lower cost of capital once the development completed, giving the borrower certainty on both delivery and pricing,” said Michael Clifford, commercial director at District & County Investments.
DCI funded both the land acquisition and construction costs, with its exposure repositioning as the project progressed from development phase to completed standing asset.
Market implications
The structure addresses a common challenge in development finance, where borrowers face uncertainty when seeking refinancing mid-project. By pre-agreeing exit terms at origination, developers avoid renegotiating during the completion phase when their negotiating position may be weaker.
For the lender, completing the build cycle through to a standing residential asset reduces credit risk exposure. The 17 apartments represent completed, saleable security rather than development-stage collateral.
Clifford noted that the approach aligned interests across the transaction: “The community benefits from new homes, the borrower benefits from reduced costs and certainty, and we benefit from a de-risked, high-quality asset.”
Sector context
The transaction reflects a trend among some development lenders towards integrated financing structures on smaller residential schemes and conversions, where exit stage lender appetite can be less predictable than on larger developments.
DCI indicated it continues to offer bridging and development finance facilities with similar structural approaches, focusing on execution speed and deal lifecycle alignment.
The Stansfield Mill scheme adds 17 high-specification flats to the local housing supply in the Sowerby Bridge area.
