Investment platform Downing Crowd has launched a new property development bond offer, as part of a 12-month programme to raise £50 million for small and medium-sized enterprise (SME) property developers and small businesses that want to develop their premises, such as pubs and care homes.
Over half (54%) of small to medium-sized (SME) housebuilders say a lack of financial support is the second biggest barrier to building new homes* - a contributing factor in the UK housing supply crisis. Small developers were estimated to be responsible for around 15,000-20,000 new build completions in 2015/16, even fewer than the outputs during the 2008-09 recession**.
£38 million worth of property loans have already been committed from this loan book and there is an expected pipeline of further property loans totalling over £24 million (both figures as at June 2018).
Property bond case study: Cornwell Construction
Gloucester-based residential property developer, Cornwell Construction, recently received a £5.1 million loan from the investment manager to support the delivery of a local, affordably priced, housing scheme. Ten of the total 33 homes planned for the development are nearing completion, with the remainder expected to complete by 2020.
This latest bond offer will offer a choice of two fixed rates for investors, either paying 4.5% P.A. for investing until August 2019, or 5.5% until 2020. All bonds in the programme can be held in the Downing Innovative Finance ISA which allows investors to earn this interest tax-free.
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Jean Birrell, Downing LLP