Pluto is a leading
provider of smarter
finance for UK
property developers
and investors

With our highly experienced team, we have lent over £3bn in property finance since 2011. We pride ourselves on building long-term relationships and providing a fast turnaround for our clients. Pluto Finance is backed by some of the world’s largest institutional investors. 

How we can help

Pluto Finance provides bridging, development and investment finance for property developers and investors throughout the UK.

We have a team of experts with extensive experience across all areas of lending. We believe in finding a solution that fits our borrowers needs rather than fitting them into a standard product.

Intermediaries

Pluto Finance is pleased to work with intermediaries who are assisting developers and investors to arrange debt finance.

We look forward to hearing from intermediaries and working with them to find a tailored solution to fit their client’s funding needs. 

Recent transactions

Tailoring Residential Rental Funding In A Higher Interest Rate Environment by Lending Director, Guy Norman

In the ever-evolving landscape of real estate development, developers are increasingly exploring the transition of newly completed residential projects from build-to-sell to rentals. This is primarily in response to slower residential sales rates (in part caused by the rise in mortgage rates, though this is easing now). On the flip side, the rental market is performing well in terms of strong demand for units and high recent rental growth (private rentals have increased by 12% over the past 12 months – source: Zoopla). 

From the perspective of net operating income, the decision to embrace the rental market becomes even more compelling. Why not leverage the potential for increased rental income to counterbalance the impact of higher capital costs?

Until recently, the process of transitioning to rentals was relatively straightforward. Developers could readily refinance their existing development debt facilities with new investment term loans. This approach worked well, thanks in part to low-interest rates and the continuous upswing in property prices, which offset the loss of the new build premium. However, the financial landscape took a turn when inflation spiked and the Bank of England implemented multiple interest rate hikes. As a result, many lenders adjusted their net debt yield requirements, increasing them from 6% in early 2022 to approximately 8% by Autumn 2023. This shift has created funding gaps when it comes to refinancing existing debt facilities, despite the notable surge in rents.

Within the realm of BTR lending, we frequently witness lenders adopting inventive approaches. These include the introduction of higher arrangement and exit fees, strategically designed to compensate for lower finance rates. This, in turn, leads to an enhancement in serviceability (during the loan term) and an increase in loan-to-value ratios (LTV), by as much as 5% (as serviceability is often restricting the LTV).

Furthermore, some lenders have chosen to relax their interest coverage ratio covenants (given we are near the peak of the interest rate forward curve), thereby facilitating more BTR deals. Another viable strategy is to bisect the residential units (by selling a portion of these units and renting the remaining ones). This approach not only alleviates the slower sales pace but also bridges the refinancing funding gap (as up to 100% of unit sale proceeds can be used to repay the loan).

 

It’s crucial to recognise that each situation is unique, demanding a tailored approach. By carefully customising these strategies, it’s often possible to find mutually beneficial solutions that satisfy the needs of both borrowers and lenders. In this dynamic real estate environment, adaptability and innovation are the keys to success, ensuring that developers can navigate the shifting tides of the market with confidence and resilience.

Pluto Finance completes on £25m Midlands BTR Loan with Monk Estates, in conjunction with the Housing Growth Partnership and MAF Finance Group.

Pluto Finance, a leading provider of development finance, is pleased to announce its second loan completion with the Housing Growth Partnership (HGP), for a transformative project in the Midlands by renowned real estate company, Monk Estates.

 

The loan, totalling £25 million, will be instrumental in supporting the repurposing of an Edwardian factory, and the construction of two interconnected new build apartment blocks. This ambitious project is a collaborative effort between the four entities. MAF is a pre-eminent debt and equity advisory group, a specialist in real estate transactions.

 

The repurposed Edwardian former hosiery factory, spanning four stories, will be transformed into a modern and stylish residential hub, blending heritage charm with contemporary design. Adjacent to the factory, the two interconnected new build apartment blocks will seamlessly integrate with the existing structure, enhancing the development’s architectural appeal, and assisting in reducing overall massing.

 

Upon completion, this exceptional development, undertaken by Monk Estates, will feature 171 residential units, catering to a diverse range of lifestyles and needs. Additionally, an associated commercial unit let to Sainsbury’s Local will serve both residents and the surrounding community, further enhancing the project’s vibrancy and economic impact. The development is anticipated to provide an unparalleled residential experience, offering modern amenities, green spaces, and a sense of community within a historical setting.

 

The Pluto Finance team is thrilled to support this development, which is aligned with their commitment to supporting innovative and sustainable development projects in the BTR sector.

 

Evan Griffin, Lending Director at Pluto Finance commented “We are excited to partner with HGP and MAF Finance Group on this Midlands build-to-rent scheme by Monk Estates. “The repurposed factory, coupled with the new build apartment blocks, will create a distinctive living environment, contributing to the ongoing urban renewal in the area, and addressing the need for city centre living of this nature. “

 

Sam Monk – Director of Monk Estates Commented

“We are very pleased to be working with Pluto Finance on this project. They have been very helpful and forthcoming which in the current evolving debt market is a breath of fresh air, we thank MAF Finance group for their help and look forward to doing more together in the future”.

 

Dave Chapman, Managing Director at MAF Finance Group Commented

“Both Paul Delaney and I are delighted to have been involved in arranging the debt and introducing the client to HGP and Pluto, working with all parties, to structure this exciting deal. This is the second transaction we have assisted Robert and Sam Monk on in the BTR sector and we look forward to seeing the Hylyfe Leicester scheme flourish as the development progresses.”

 

Mike Murphy, Investment Director at Housing Growth Partnership (HGP) Commented

“We are thrilled to be supporting our new and highly experienced partner Monk Estates to deliver HGP’s first Build to Rent scheme in the East Midlands region. Our £5.7m investment will enable Monk Estates to deliver much-needed rented accommodation in a prime location in Leicester City Centre. The Highcross development will significantly contribute to the regeneration that is already well underway in the area, further enhancing the attractiveness of the location to the target rental market”.

Pluto Finance, Devonshire Homes, and Housing Growth Partnership Join Forces to Provide Much-Needed Housing in Wincanton

Pluto Finance, a leading provider of property finance has completed a £10m loan with the strategic partnership formed by Devonshire Homes and Housing Growth Partnership (HGP) for the development of a new build project featuring 31 high-quality homes in Wincanton. This marks Pluto Finance’s first loan with Devonshire Homes and HGP and highlights the company’s commitment to delivering innovative financing solutions for the housing sector.

Pluto Finance is delighted to be working with Independent West Country house builder Devonshire Homes, a trusted leader in the real estate development industry. With its unparalleled reputation, Devonshire Homes is widely esteemed for delivering an exceptional homebuying experience and demonstrating an unwavering commitment to superior craftsmanship.

This development known as Dancing Green, brings together the expertise and resources of three renowned entities, all dedicated to addressing the pressing need for quality housing. Dancing Green will address the demand for much-needed housing in the area and is expected to generate employment opportunities, benefiting the local community, and contributing to the overall growth and prosperity of the region. 

With an impressive turnaround time of just seven weeks from credit approval to loan completion, showcasing the efficiency and commitment of all involved parties, Pluto Finance has demonstrated its commercial acumen and flexibility throughout the due diligence process. This adaptability and commitment to finding solutions contribute to the seamless collaboration between the three entities.

Jonathan Scott, Lending Director at Pluto Finance expressed his enthusiasm about the partnership, stating, “We are delighted to work with Devonshire Homes and HGP on this project. The speed of execution and our ability to navigate complexities demonstrate our commitment to providing innovative financing solutions. Together, we aim to create exceptional housing opportunities while fostering economic growth and employment in the area.”

 

Angus Cook, Managing Director at Devonshire Homes commented: “We’re pleased to be partnering with Pluto Finance and HGP to bring this development to fruition. This partnership has allowed Devonshire Homes to react rapidly and now, Dancing Green will bring much-needed, high-quality new homes to people who really need them.”

 

Arnaud De Blay, Investment Director at Housing Growth Partnership: “I am really pleased to have completed another investment alongside Devonshire Homes, a long-standing and very successful partner. Pluto Finance have been great to work with and have, all along the transaction process, demonstrated a willingness to understand our requirements and a commitment to get the deal over the line in the required timeframe”.

 

Pluto Finance backs Salcombe
scheme with multimillion-pound boost

Pluto Finance has completed a £7.8m development loan for Park Green to fund the build of 21 residential units in Salcombe.

The scheme will comprise one, two, three and four-bedroom apartments and houses.

It is being brought forward in a joint venture with Barwood Capital, which has been investing in UK developments since 2009 and will be a 50 per cent member of the borrowing entity.

The scheme has been designed to address a “chronic shortage of owner-occupied housing in the area”. It is subject to a ‘local and primary residence’ restriction, which will help grow the community.

The £7.8m loan was funded through Pluto Finance’s streamlined stretched development finance offering and enabled the developer to acquire the site “without the need for bridge lending and put in place construction finance at the same time”.

Jonathan Scott, lending director at Pluto Finance, said: “We are delighted to be backing this exciting project in the South West. We take immense pride in being a client-focused finance provider and value the opportunity to work with a growing and thriving borrower like Park Green.

“We believe this new development will benefit the community.”

Stephen Thompson, director at Park Green commented: “Having taken four years to negotiate a planning consent on this site, we were pleased to swiftly agree the funding with Pluto.

“We are looking forward to starting building after Easter and working with Pluto Finance.”

TAGS

director / housing in Salcombe / Jonathan Scott / lending director / Park Green / Pluto Finance / Stephen Thompson

Pluto Finance provides Seven Capital with £13.5m for Royal Angus Hotel development

Pluto Finance has provided a £13.5m loan to leading UK developer SevenCapital Group to revitalise the Royal Angus Hotel and deliver 161 new serviced apartments to Birmingham city centre.
Construction is now underway on the former 186 bedroom hotel, with the project set to deliver the conversion and extension of the building into an aparthotel, including 84 studios, 71 one-bedroom and 6 two-bedroom apartments.


The aparthotel, which is anticipated to launch in late 2023, will be an expansion of SevenCapital’s existing hospitality business, which includes the four-star Park Regis Hotel within the Five Ways area of the city centre, close to Edgbaston.


Damien Siviter, group managing director at SevenCapital, said: “We have worked incredibly hard to deliver a scheme which will transform the Royal Angus Hotel and provide high quality, desirable accommodation which will appeal to a wide range of tourists and business professionals, for both short and longer stays. We are pleased to have Pluto Finance’s support and look forward to bringing this exciting new city centre project to fruition.”


Guy Norman, lending director at Pluto Finance, comments: “There is a shortage of flexible, high quality residential accommodation located in Birmingham city centre and this project will help meet strong demand from individuals and companies. We are delighted to have started a partnership with SevenCapital and we hope to support them on their future transactions.”

TAGS

director / Birmingham / Guy Norman / lending director / Pluto Finance 

Pluto Finance fires starting pistol for regional expansion with funding for £21m Elevate Property Group scheme in Gun Quarter, Birmingham

Pluto Finance has completed its third loan with Elevate Property Group, providing development finance for 85 new residential units in the up-and-coming Gun Quarter district of Birmingham. 

Steeped in character and heritage, the Gun Quarter is described as the City’s most attractive area for residential development and is just 11-minutes’ walk from the City Centre.

Greg Dunne, Pluto Finance’s Lending Director, says: “We are delighted to be backing this exciting project and working again with the highly regarded Elevate Team as we expand our lending beyond the southeast.”

“This loan follows Pluto’s previous £40m funding for Elevate’s 219-unit scheme in Ashford, Kent, and highlights the focus Pluto puts on repeat business with our clients, recognising the excellent customer service, pricing and flexibility that we offer.”

 

Steve Dodd, founder of Elevate Property Group comments “We are delighted to have recently completed another Loan with Pluto Finance. It is a relationship that is continuing to grow, and we look forward to working with them on more schemes in the future.”

TAGS

Development loan / Greg Dunne / Lending Director / Elevate Group / Birmingham / Pluto Finance

Meet the Team: Simon Chapman, Lending Director

1.   What has been the highlight of your career at Pluto so far?

 

I would say drawing my largest ever loan stands out. The loan was for a client who I have worked with for over 10 years, starting with their first development; a conversion of a house into flats, and then again with their largest project to-date – a scheme comprising 100 units in West Hampstead. This utilised a loan of £45m to deliver this scheme.

 

The project is now completed, and the units are selling extremely fast. It is great to see and support someone I have maintained a collaborative relationship with over the years excel from the start of their journey and into the future.

 

2.     Can you share an example of a particularly challenging bridging loan scenario you’ve encountered and how you and the team navigated through it successfully?

 

Commercial bridge loans are not easy, in particular development site opportunities. One in particular stands out relating to a recent project in Kent. The difficulties here were that the site was an existing PH and storage facility, where our client was intending to receive planning consent for a small, mixed use light industrial scheme, comprising of 6 units. What was difficult here was that the end use value was guided by the strength of the potential commercial tenants, with terms that were not yet agreed. We had to take a view on the GDV, the construction costs and the fact it did not have planning yet to work out where we would be on leverage.

 

Suffice to say, our client now has planning consent, pre-lets are in place and we are about to drawdown the development loan piece.

 

Examples of loans like these need patience, precision and understanding of such complex issues so that we can inevitably ensure we can guide our client in the clearest possible way.

 

3.     What event this year are you most looking forward to?

 

It has to be the B&C Awards! Held every year at the Hurlingham Club, it brings together the best in our industry, and provides a platform for fostering collaboration, pioneering new ideas, and above all, it is definitely a fun night! I have attended every year since it started, and you will see Pluto Finance there again this year.

 

4.     Do you have any hidden talents?

 

Prior to getting into property finance, I was actually a trained chef. Way back in the mid 90’s, I worked in a few different restaurants, and I was second chef for a chain of Italian restaurants called Café Uno, based in Tunbridge Wells. I assisted in opening new restaurants in Brighton and Sevenoaks, training their kitchen chefs and being there for those hectic first few weeks of a new restaurant opening.

 

People say that Italian Food is the easiest to cook using few ingredients, but the reality is what you do with them. My signature dish has to be my Beef Ragu… I have my own secret recipe too!

 

5.     What is your favourite film?

 

      Must be the Godfather trilogy, but in particular Godfather 2. One of Francis Coppola’s finest Directorships, pure class.

 

6.     What are the top 3 things that are influencing the market you work in at the moment?

 

     Generally, it would have to be inflation pressures, interest rates and general uncertainty in global stability.

 

7.     Favourite football team?

 

     A lot of people do know this but my team is Millwall FC. I am a season ticket holder and go to both home and away games with my son. Real football for real fans I would have        to say.

 

8.     What’s the best kept secret about Pluto Finance?

 

We can beat most lenders on pricing from low to high leveraged transactions across multiple asset classes. We make a point in understanding transactions and finding solutions for complex matters… we don’t have a rate card, but price for risk.

 

If you want to find out more on how we can help you with your next project, contact Simon via email schapman@pluto-finance.com or give him a call on (0)207 442 2117

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