Overview
Hampshire Trust Bank (HTB) provided a £1.6m development facility to support a residential scheme in Barford, Norfolk. The 16-month facility will fund the construction of four new freehold homes, alongside the servicing of two additional residential plots. Two of the completed homes will be delivered as Discount Market Sale properties, supporting affordable housing provision for local owner-occupiers. The transaction marked the start of a new relationship with the borrower, an experienced regional developer, with discussions already underway regarding future opportunities.
The Challenge
While relatively modest in scale, the transaction involved a number of planning, legal and funding complexities that required careful management before completion.
Key challenges included:
- Affordable housing obligations attached to the development
- Nutrient neutrality requirements and environmental mitigation measures
- Multiple planning and legal considerations requiring detailed review
- Changes to the original funding structure during the transaction
- As the transaction progressed, maintaining momentum became critical to ensure the borrower could move forward without unnecessary delays.
The Solution
HTB worked closely with the borrower and professional advisers to restructure the funding package and deliver a solution tailored to the scheme’s evolving requirements.
Key features of the deal:
- 1.6m development finance facility
- 16-month loan term
- Funding for four new homes and the servicing of two additional plots
- 65% LTGDV structure
- Sale of completed units and land parcels as the exit strategy
To meet the deadline, HTB:
- Restructured the funding package following the withdrawal of the original mezzanine lender
- Supported the borrower in securing additional funding
- Approved an increase in leverage to 65% LTGDV
- Assisted in appointing a replacement monitoring surveyor
- Worked collaboratively with the borrower and wider professional team to navigate planning, legal and environmental requirements
Sustainability and Social Impact
The development has been designed to incorporate a number of sustainability and social value features, including:
- Low-carbon heating systems within the new homes
- Nutrient neutrality measures supported through the purchase of nutrient credits
- Installation of a new treatment plant to mitigate environmental impact
- Delivery of two Discount Market Sale homes to support local housing affordability
Execution
The transaction was led by Alexia Evans, Lending Director and support by Olivia Emmett, Relationship Manager. Savills acted as valuer, Wilson Edwards as Monitoring Surveyor and Glovers provided legal advice throughout the transaction.
The Outcome
- £1.6m development finance facility completed
- Four new homes funded for delivery in Barford, Norfolk
- Two serviced residential plots supported
- Affordable housing provision incorporated into the scheme
- Funding structure successfully reconfigured following changes during the transaction
- New borrower relationship establishes
- Further opportunities already being explored with the developer
What This Demonstrates
Flexibility
HTB’s ability to adapt the funding structure as circumstances changed ensured the project remained viable and continued progressing towards completion
Problem Solving
By navigating planning obligations, environmental requirements and funding changes, HTB delivered a practical solution that enabled the scheme to move forward with minimal disruption.
Client & Partner Feedback
Alexia Evans, HTB:
“Although the development itself was relatively straightforward, the transaction became significantly more complex as it progressed. Our role was to respond proactively as the transaction evolved, restructuring the funding package and working with the borrower and wider professional team to navigate each challenge while keeping the transaction moving towards completion.
By adapting the funding structure to changing circumstances, we were able to support the borrower through to completion. That’s exactly what relationship-led development finance is about, and we’re delighted this transaction marks the beginning of what we hope will be a long-term relationship.”
Neil Leitch, Managing Director of Development Finance at Hampshire Trust Bank, added:
“Transactions like this are becoming increasingly common. Good schemes are rarely held back by a lack of demand or developer capability. More often, they encounter evolving requirements, changes to funding structures or unforeseen issues that emerge as projects progress.
For experienced developers, having a lender that can respond to those challenges can make the difference between a project stalling and a project being delivered. Our role isn’t simply to provide funding at the outset, but to work alongside borrowers as projects evolve and help keep viable developments moving.”
Conclusion
This transaction highlights HTB’s ability to support developers through evolving circumstances and complex funding requirements. By combining flexible structuring, collaborative working and a relationship-led approach, HTB was able to overcome a series of planning, legal and funding challenges, enabling a viable residential scheme to move forward and establishing the foundations for a long-term lending relationship.