£35.5m build-to-rent finance backs Earlsfield scheme

United Trust Bank has provided £35.5m of build-to-rent finance for Wandle Place, a 96-apartment mixed-use scheme in Earlsfield, south-west London. The development has a gross development value of £51.1m and includes about 9,000 sq ft of commercial space.

The loan is a five-year bridge-to-investment facility. It lets the developer, Dominus New Homes, refinance its existing development loan and release equity as the scheme nears practical completion. The lender says nearly half of the apartments had tenant agreements within seven weeks of marketing.

Dominus New Homes has delivered more than 2,000 homes, mainly for sale. Director Chris Mason said: "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." He said the company also needed an investment loan to repay its development finance on time.

United Trust Bank's Structured Property Finance team set the loan at 70% loan-to-value. The rate steps down once an agreed interest coverage ratio is met, and the lending margin falls after rental income settles. The bank expects that within three to six months of practical completion.

Property Finance Services brought the deal to the bank for Dominus New Homes. Its founder, Stan Lersch, said the aim was to find funding that replaced the existing facility and gave certainty over the long term.

Martin Cameron, business development director for structured property finance at the bank, said the deal shows the bank can lend large sums across the living sector. It is the bank's first transaction with Dominus New Homes.

The five-year term covers the first letting period and the move into the investment phase, so the developer does not need to refinance again soon.