UTB completes £35.5m bridge for London BTR

United Trust Bank (UTB) has completed a £35.5m bridge-to-investment facility secured against a BTR development in South West London.

With a GDV of £51.1m, the development is called Wandle Place and includes 96 BTR apartments and around 9,0000 sq ft of commercial space.

The five-year facility, provided by UTB's structured property finance team, enabled developers Dominus New Homes to refinance their existing development loan and release equity from the scheme as it approached practical completion.

The scheme in Earlesfield has already attracted strong rental demand, with tenancies agreed on nearly half of the apartments within seven weeks of marketing.

UTB structured the facility at 70% LTV, providing the borrowers with funding certainty through the initial letting period and into the investment phase.

The bespoke facility includes a reduction in the lending margin once rental income has stabilised and an agreed ICR has been achieved. This is expected within three to six months of practical completion and allows the borrowers to benefit from more competitive funding costs as the development becomes established.

"BTR is an increasingly important part of the UK residential property market, and developers need funding partners who understand that completing a scheme is only one stage of the investment journey,” said Martin Cameron, business development director (structured property finance) at UTB.

"At £35.5m, this is a substantial commitment to a new UTB customer, and a good example of how our structured property finance team can provide flexible, commercially attractive funding for larger and more complex property transactions."

Chris Mason, director at Dominus New Homes, added: “Our business model has always been to build for sale, but current poor demand to buy new flats in London required a rental approach this time, together with an investment loan to repay our development finance on time.

“After all the hard work involved in bringing a development of this scale to completion, it's particularly rewarding to see such a quick and positive response from prospective tenants.

“With UTB’s funding in place, we can concentrate on getting the remaining apartments let, welcoming our first residents and making this a development people will be delighted to call home.”