Pivot Finance has provided a £1.3 million phased development facility for a residential scheme in Yeadon, approximately eight miles north west of Leeds city centre. The 21-month facility will fund the refurbishment of an existing detached house and the construction of four new family homes.
The site comprises a stone-built detached house on a larger plot, with land behind the property allocated for the additional homes. The borrower, who has 30 years of residential development experience across Leeds and the wider North of England, is delivering the project through their own contracting business.
Facility structure
The facility has been structured in two phases. The refurbishment phase was funded at 65.9% loan-to-gross-development-value and 82.3% loan-to-cost. The development tranche for the four additional homes will be released separately once full planning consent is secured.
Pivot structured both phases under a single facility, meaning the borrower will not need to arrange separate development finance if planning is granted. This marks the fifth scheme Pivot has funded for the developer.
The deal was completed in 16 days by Georgie Crocker, relationship manager at Pivot, and Nathalie Manser, credit manager at Pivot.
Market context
The facility comes as the UK faces what the housing minister has confirmed as an ‘acute’ housing crisis, with demand for family homes remaining strong in areas surrounding major cities. While public support for local housebuilding has been shown to outweigh opposition, developers continue to face challenges in securing planning consent and development finance in current market conditions.
Crocker said: “Our track record with the borrower meant we could move quickly, having funded four previous developments together. From day one, the borrower has certainty to acquire and refurbish the existing house, with Phase 2 funding agreed and ready to draw once planning is secured.”
Manser added: “Recognising the different risks and timelines across the two phases allowed us to structure the facility around the way the development would actually progress.”
The phased approach allows the borrower to begin refurbishment work immediately while awaiting planning consent for the new-build element of the scheme.
