Paragon's development finance proposition enters BTR market

Paragon Bank has revealed it will now provide loans of up to £35m to fund the acquisition and development of BTR schemes.

The lender’s new proposition aims to support the lifecycle of BTR schemes in established residential cities and large towns across the UK, by funding site acquisitions, developments, letting completed schemes, and short-term stabilisation facilities.

It will also assist developers in taking opportunities to benefit from the potential growth in the rental market through the development loan term by retaining the scheme after it is completed. 

Neal Moy, managing director for development finance at Paragon (pictured above), said: “The BTR market is a natural extension of our proposition to support experienced residential developers.

“The sector has continued to enjoy strong growth and complements the BTL market in offering a good quality home in the PRS.  

“We are offering something different to the typical BTR funding model where the developer holds most of the development risk but has limited upside benefit.

“We believe that the developer can benefit by retaining the scheme post practical completion, enabling them to deliver stabilised BTR schemes.”

Simon Dekker, senior relationship director for development finance at Paragon, added: “The housing market in the UK continues to evolve, with the expanding BTR market providing an increasing alternative to the traditional build-to-sell model as the demands of the UK's population changes.

“We have supported the PBSA market over many years and believe that now is the right time to add our experience and support to the BTR sector."

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