The North East Property Fund (NEPF) has doubled to £20m following its success in stimulating housing development to create and sustain jobs in the construction market. The fund can now also facilitate loans up to £2m, double the previous limit.
The NEPF was established in 2017 by FW Capital, with support from Santander and the North East Local Enterprise Partnership (LEP), in response to demand from smaller construction and property development companies that have struggled to access development finance from traditional lenders.
The new capital, released by the North East LEP will provide loans for residential and non-speculative commercial schemes.
Since its launch, the NEPF has invested over £17.3m in the construction of 151 new homes and the creation of more than 3,504sqm of commercial space across the region. This has created or secured 338 jobs.
Now, following increased demand and a strong pipeline of investments, delivery of the Fund has been extended by three years. Repaid funding is available for reinvestment in new development schemes and is targeting to provide £54m of development loans over its life.
The NEPF addresses the gap in the market that has worsened in recent months by the impact of Covid-19, which has seen traditional lenders move further from this market making it difficult for smaller developers to access finance.
Beneficiaries of the North East Property Fund include Andco Homes Ltd, which secured £750,000 to build three four-bedroom townhouses on the site of the former Whisky Bends pub, on Whitley Bay Promenade. The funding, the first NEPF investment in North Tyneside, supported local business Andco to regenerate the seafront site.
Horden Grange Developments Ltd recently used a £864,000 NEPF investment to build eight affordable new homes in Easington Colliery, County Durham. The homes, part of a development of 16, replaced a disused former nursing home.
The Fund caters for commercial schemes too. James Southern Real Estate Ltd secured a £780,000 investment to facilitate the construction of the 3,800 sq.ft retail unit for the Co-op on the site of the former car showroom in Shildon.
FW Capital Investment Executives Tony Cullen and David Pesarra are responsible for facilitating the fund.
FW Capital Fund Director Joanne Whitfield said: “We are delighted that the North East Property Fund has doubled to £20m.
"The impact of our investment so far has been remarkable, leading to the construction of new homes and commercial premises across the region, while encouraging economic growth and job creation.
“This extra £10m will allow us to support even more small-scale property schemes that would otherwise find it difficult to get the finance they need. More developers will benefit, sustaining jobs in the construction sector, which is good for everyone.”
Helen Golightly OBE, Chief Executive of the North East LEP, said: “The North East Property Fund is positively impacting the North East regional economy by safeguarding and creating jobs, reducing the housing shortfall and improving commercial space.
“Having a diverse housing market is vitally important to attract new investment in the region and support the goals set out in the Strategic Economic Plan of creating more and better jobs and ensuring the area is considered a great place to live, learn and do business.
“The progress that has been made so far is outstanding, and we are excited to see the Fund expand and continue its journey.”
The North East Property Fund was established with the aim of supporting the development of small-scale property schemes and is backed by Santander and the North East Local Enterprise Partnership (LEP).
It offers loans from £250,000 up to £2m for residential and non-speculative commercial developments in Tyne and Wear, Northumberland and County Durham. The Fund can provide up to 100% of build costs for suitable schemes with repayment terms available up to two years.