Editor's note: This brief was summarised by The Property AI Newsroom from a report by PropertyWire. Read the original article for full details.
First-Time Developer Secures £895,000 Loan for Bromley Project
Avamore Capital has provided an £895,000 development loan for a two-home ground-up construction project in Bromley. This marks the borrower's first development of this type.
The 15-month facility was structured at 70% loan-to-GDV. Avamore Capital agreed to fund the majority of professional costs and Community Infrastructure Levy (CIL) payments directly, without requiring formal monitoring surveyor interim reports for those items. This approach was intended to reduce administrative delays during the construction phase.
The transaction faced challenges, notably that the planning permission was due to expire within approximately two months of the loan completion. Although the borrower had experience in property, they had not previously undertaken a ground-up development project. Avamore Capital reviewed the borrower's plan to commence works and preserve consent within the required timeframe, and assessed both the developer’s track record and the project’s fundamentals before proceeding.
The deal was introduced by Atlas Property Finance. Representatives from both Avamore Capital and Atlas Property Finance commented on the process, noting the importance of the borrower's strategy and the strength of the professional team supporting the project.
The transaction reflects a trend in development finance, where lenders are increasingly assessing borrowers’ wider capabilities rather than focusing solely on previous project types. This approach differs from investment strategies in the buy-to-let sector, where track record remains a primary consideration. The Bromley project is part of a pipeline of small-scale residential developments across London and the South East, as developers navigate planning constraints and evolving government housing policies. The 70% loan-to-GDV structure is typical for ground-up residential schemes in the current lending environment.
Source: PropertyWire