Pivot has completed a £1.3 million development facility for the refurbishment of a house and the construction of four new homes in Yeadon, Leeds.
The lender structured the 21-month facility in two phases, allowing work on the existing property to begin while the developer awaits full planning consent for the new homes.
The detached stone-built house stands on a larger plot about eight miles north-west of Leeds city centre and less than a mile from Leeds Bradford Airport. Land behind the property has been allocated for four family homes.
The borrower has 30 years of experience in residential development, refurbishment and regeneration across Leeds and the wider north of England. His previous work includes apartment conversions, new-build schemes and larger portfolio projects.
It is the fifth scheme Pivot has funded for the developer. The work is being carried out on a self-build basis through his contracting business, allowing construction to start as soon as the initial funds were released.
The refurbishment phase, which carries no planning risk, was funded immediately at 65.9% loan-to-gross-development-value and 82.3% loan-to-cost. A separate tranche for the four new homes has been ring-fenced and will be released once full planning consent is secured.
Pivot said the single facility avoided the need for the borrower either to delay the refurbishment until planning was granted or to seek a separate development loan later, which could have required another valuation, legal process and underwriting exercise.
The lender underwrote both phases at the outset using one facility, one set of legal advisers and a single approval process.
The transaction was led by Georgie Crocker, relationship manager at Pivot, and Nathalie Manser, credit manager. It completed in 16 days.
Crocker (pictured) says: “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.
“This removes the need to source new finance between phases. In a challenging market, making the funding process as smooth as possible for developers is a priority for us; ultimately, we all want to see the development succeed.”
Manser adds: “Recognising the different risks and timelines across the two phases allowed us to structure the facility around the way the development would actually progress.
“Our efficient credit process meant we could agree that structure quickly, giving the borrower immediate funding for the refurbishment while retaining certainty around Phase 2.”
Rebecca Smith at Knight Frank carried out the valuation, while Nick Draper at Watts acted as monitoring surveyor. Jill Parker, Liz Roberts and Leon Pascal at Dovetail Law acted for Pivot on the legal work.
