Together launches inaugural development finance facility

Together has announced its inaugural securitisation facility for development lending, which will unlock the additional finance needed for building projects.

This will include experienced SME regional developers undertaking housing schemes, student accommodation, care homes, social housing and mixed-use projects.

Together, which has its own development finance team, has funded the delivery of over 7,000 homes over the last five years.

Britain currently has a backlog of 4.3million new homes “missing” from the national housing stock, according to researchers from the Centre for Cities. The analysis shows that it would take at least 50 years to fill this deficit, if the government's current ambitions to build 300,000 homes a year in England is met.

There have also been difficulties in securing planning permission, with approvals for new housing developments and conversions falling to record lows in 2023.

However, in its latest report, Opportunities and Outlook; the future of commercial property, Together identified the vast majority – 73% - of SME property developers are optimistic about the outlook of their business over the next 12 months.

Four in ten (40%) of property developers would seek out additional funding from specialist lenders over the next 12 months, according to the results of a survey commissioned for the report.

Together’s new £150m securitisation facility, known as ADALO, is supported by a portfolio of loans secured against developments in England, Wales and Scotland, and refinances assets forming part of the group’s senior secured notes.

The new facility complements the group's existing seven public residential and four commercial real estate mortgage-backed securitisations, six private securitisation facilities, senior secured notes and banking syndicate facility.

Ian Pickering, director of development funding at Together, said: “Our new £150 million securitisation facility will provide a much-needed shot in the arm to housebuilding schemes across the country and help developers fill some of this backlog of ‘missing homes’.

“We know from our own research that there is a huge appetite from UK small and medium enterprise (SME) house builders for projects around the country.

“We’d expect to see this demand continue to grow, supported by lower borrowing rates, a continuing decline in inflation and growing wages. Together’s new funding facility will open doors to even more property developers and help them provide much-needed homes across the UK.”