Lending

Pluto Finance have a team of experts with extensive experience across all areas of lending including bridging and development finance. We believe in finding a solution that meets the clients needs rather than fitting them into a standard product.

Bridging

At Pluto Finance we understand that you do not always have the luxury of time when it comes to acquiring or refinancing an asset. With an in-depth knowledge of the bridging sector and an average transaction time of 4 weeks from first enquiry to drawdown we know how to get a deal across the line.

Our credit process is entirely in house which means you are in direct contact with the decision makers from day one. We can offer indicative terms within 24 hours that have been pre-screened by our credit team giving you high confidence of deliverability.

We have an appetite across all bridging assets and provide bridging Finance for various property types, including residential, commercial, and mixed-use developments.

Overview
Loan £2m - £30m
Loan term 12-24 months
Pricing Subject to transaction incl. margin & fees
Recourse Package to consist of first legal charge over the asset and suitable guarantees

Development

Pluto Finance provides flexible financing options for property developers and investors, with loans ranging from £10m-£100m. We offer Stretched and Senior development finance – offering cost-effective, flexible, and bespoke funding across Build-to-Sell, Build-to-Rent and Student Accommodation.

Since 2011 we have been proactively working with developers to tackle the chronic shortage of housing across the UK.

We aim to provide a fast and efficient service to our clients, with a focus on delivering tailored financing solutions that meet the specific needs of each borrower.

With one of the widest product offerings in the market across a range of leverage and pricing options. We are the first-choice funding partner for your scheme.

Overview
Loan £10m -£100m
Loan term 12-60 months
Pricing Subject to transaction incl. margin & fees
Interest Treatment Rolled
LTV Max 70%
LTC Max 85%
Recourse Package to consist of first legal charge over the asset and suitable guarantees

Investment

Pluto Finance offers a range of financing options for the development of BTR and PBSA projects, including senior debt and stretch. We have an experienced team of professionals who have a deep understanding of the market and are able to provide tailored financing solutions that meet the specific needs of each borrower.

In addition to financing BTR / PBSA projects, Pluto Finance is also able to provide expert advice to developers who are considering entering the market. Our team can provide guidance on a range of issues, including site selection, planning requirements, and design considerations.

Pluto Finance’s involvement in the BTR / PBSA market demonstrates our commitment to supporting innovative approaches to property development in the UK. Our expertise and flexible financing options make it a popular choice for developers who are looking to enter this growing market.

Overview
Loan size £10m-£100m
Max LTV 65%
Max LTC 80%
Loan term 60 months
Pricing Subject to transaction incl. margin & fees
Recourse Package to consist of first legal charge over the asset and suitable guarantees

Lending Team

Bertie Edwards-Hedges

Lending Manager

Evan-scaled-1.jpg

Evan Griffin

Lending Director – North

Bertie Edwards-Hedges

Lending Manager

Bertie is an experienced real estate finance professional who joined the Pluto business in 2021 and is a Lending Manager within the Pluto Lending Team. He originally joined the business as a senior member of the credit team, responsible for the structuring, underwriting, and execution of new Pluto debt facilities. Bertie has experience underwriting Development, Bridging & Investment facilities across a range of asset classes, including Residential & Mixed-use development, Build-to-Rent, Commercial and Retail assets. In his role as Lending Manager, Bertie is now responsible for providing structured finance solutions to new and existing Pluto finance clients, with a particular focus on assisting SME housebuilders with their Development Finance requirements. Prior to joining Pluto, Bertie worked for a private investment fund for 3 years and specialised in underwriting mezzanine development facilities across London and the South of England.

Evan Griffin

Lending Director – North

Jonathan Scott

Lending Director – South West

Guy Norman

Lending Director

Mario Ioannides

Associate Partner

Guy Norman

Lending Director

Simon Chapman

Lending Director

Frankie Lu

Director - Bridge Lending

Jonathan Scott

Lending Director – South West

Evan Griffin

Lending Director – North

Bertie Edwards-Hedges

Lending Manager

Evan Griffin

Lending Director – North

Based in the North, Evan joined Pluto in July 2022 from a challenger bank, in order to grow Pluto’s presence in this region. Evan has in excess of 20 years banking experience, covering roles in strategy, operational, credit and interest rate risk, before moving into investment and development lending.

Evan Griffin

Lending Director – North

Mario Ioannides

Associate Partner

Guy Norman

Lending Director

Simon Chapman

Lending Director

Frankie Lu

Director - Bridge Lending

Jonathan Scott

Lending Director – South West

Evan Griffin

Lending Director – North

Jonathan Scott

Lending Director – South West

Guy Norman

Lending Director

Guy Norman

Lending Director

Guy is a chartered surveyor and has over 15 years’ experience in real estate finance. He was directly responsible for the deployment of £750m of new funds when he worked in the Knight Frank Capital Markets Team. Guy also held a senior in-house position for a property company, raising over £100m of funds to develop and manage residential and student accommodation properties. Prior to this, Guy originated real estate debt for corporates and high net worth individuals in the front office at Lloyds Banking Group.

Guy Norman

Lending Director

Mario Ioannides

Associate Partner

Simon Chapman

Lending Director

Frankie Lu

Director - Bridge Lending

Jonathan Scott

Lending Director – South West

Evan Griffin

Lending Director – North

Evan Griffin

Lending Director – North

Jonathan Scott

Lending Director – South West

Guy Norman

Lending Director

Bertie Edwards-Hedges

Lending Manager

Jonathan Scott

Lending Director – South West

Jonathan is based in Exeter and supports housebuilders throughout the South West. Previously Lending Director for Hampshire Trust Bank where he was employed to establish the banks South West offering. He built up the debt book and client base over a period of 5 years. Jonathan has 15 years’ banking and specialist finance experience within the property development space. Previously held roles at Funding Circle and Barclays Business and Corporate Bank.

Jonathan Scott

Lending Director – South West

Mario Ioannides

Associate Partner

Guy Norman

Lending Director

Simon Chapman

Lending Director

Frankie Lu

Director - Bridge Lending

Evan Griffin

Lending Director – North

Evan Griffin

Lending Director – North

Jonathan Scott

Lending Director – South West

Guy Norman

Lending Director

Mario Ioannides

Associate Partner

Mario Ioannides, Associate Partner joined Pluto Finance towards the end of 2015. Since then, he has originated and managed £1 bn of residential development and bridge loans. Previously at Aldermore Bank; Nationwide Building Society’s commercial division and Bank of Cyprus focusing on residential and commercial development / investment loans in the UK and EU. Mario has a wide spectrum of experience in structuring all of the real estate asset class finance requirements that Pluto Finance has to offer.

Mario Ioannides

Associate Partner

Guy Norman

Lending Director

Simon Chapman

Lending Director

Frankie Lu

Director - Bridge Lending

Jonathan Scott

Lending Director – South West

Evan Griffin

Lending Director – North

Mario Ioannides

Associate Partner

Bertie Edwards-Hedges

Lending Manager

Simon Chapman

Lending Director

Simon joined Pluto in 2019. Simon has over 23 years’ experience in the property lending sector, having previously worked at the likes of Investec and Close Brothers. Simon has experience in the short term debt finance market from Bridging, Residential Development and Investment.

Simon Chapman

Lending Director

Frankie Lu

Director - Bridge Lending

Mario Ioannides

Associate Partner

Guy Norman

Lending Director

Jonathan Scott

Lending Director – South West

Evan Griffin

Lending Director – North

Evan Griffin

Lending Director – North

Jonathan Scott

Lending Director – South West

Guy Norman

Lending Director

Bertie Edwards-Hedges

Lending Manager

Pluto Finance Closes £11.5m development loan with complex land title in Milton Keynes

Pluto Finance, a leading property finance provider, has successfully closed an £11.5 million loan to support SSJ Holdings’ new residential development project in Milton Keynes. This complex arrangement includes a £1.5 million day one advance and an £8.5 million construction loan, designed to finance the development of 60 new build apartments.

 

The new build apartments are expected to significantly benefit the local community by addressing the pressing issue of housing supply in Milton Keynes. The development will not only provide much-needed new homes but also enhance the local area, contributing to urban renewal and economic growth.

The site had an unusually complicated land title structure, with a a development lease between three different counterparties.  Pluto Finance, advised by longstanding London solicitors Brechers, was able to structure around this complexity in a timely manner. A six-month lead-in period has been arranged to allow SSJ Holdings to finalise their procurement method and costings for the scheme. This comprehensive package includes site acquisition finance and a commitment to a construction facility.

Simon Chapman, Lending Director at Pluto Finance, commented: “We are delighted to be part of this transformative project in Milton Keynes. At Pluto Finance, we are committed to supporting developments that have a positive impact on local communities. This project will address the housing shortage and provide high-quality homes for residents.”

SSJ Holdings representative stated: “I would like to express my sincere gratitude for your hard work and the positive and supportive emails that helped keep the deal afloat until completion. I look forward to working together on getting the project off the ground.”.

Contact our team today to start your project.

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A Light at the end of the tunnel. Mario Ioannides, Partner.

There’s an old adage in the investment industry that says, it’s not about timing the market, it’s about time in the market.

 

Those of us in the property world know this only too well. Residential development is a long-term play, risk is based on serviceability, asset values and cost of funds.

 

Yet the macroeconomic environment does have a material impact on investment decisions. Returns must stack up, and rising rates over the past 18 months, along with elevated building material costs, has made that balance finer.

 

There is a temptation to hang fire, to wait for things to improve. But should you?

 

The Bank of England is becoming less hawkish, with its governor Andrew Bailey potentially opening the door to the first rate cut in June, stating the news on inflation is “encouraging” in a statement accompanying the Monetary Policy Committee’s decision earlier this month to leave interest rates as they are.

 

Consumer price inflation is now at 3 per cent. It rose by 0.3% in April, compared with a rise of 1.2% in April 2023. Residential property values have held relatively steady in most parts of the UK. Rightmove data showed the average asking price of property coming to the market rose by 1.1 per cent between March and April, with the annual rate of price growth now +1.7 per cent, the highest level for 12 months.

 

 

Buyer demand is holding up. The number of new sellers coming to the market is up by 12 per cent compared to this time a year ago, and the number of sales being agreed is up by 13 per cent as both seller and buyer activity rebound.

 

Supply is relatively subdued still. Office for National Statistics data showed new build dwelling starts in England were estimated to be 19,080 in Q4 last year, a 10 per cent decrease when compared to 2023 Q3 and a 51 per cent decrease when compared to 2022 Q4.

 

 

Partly, that was driven by regulation demanding costlier energy efficiency standards in new build from Q3 last year. High construction material costs also weighed on development returns.

 

That tide has turned however.

 

Construction materials prices fell by 2.3 per cent in the 12 months to March 2024, according to the latest figures from the Department for Business and Trade, this was a bigger decrease than the 1.9% drop seen in the year to February 2024.

 

Earlier this month, Bailey hinted the Bank of England could move to cut the base rate before the US Federal Reserve brings rates down, with markets now pricing that in.

 

Because of the way we price our development finance, modelling rates based on the SONIA curve rather than a simple assumption that Bank of England Base Rate will remain static over the course of a loan, we are already able to afford borrowers some of that upside. It also means we can assist developers whose strategy has always been to contribute a lower cash equity amount to kick off their projects now.

 

 

Even with tighter margins recently, we have remained active in stretched leverage development finance, facilitating up to 70% LTGDV, higher than market norms and in some instances for repeat Borrowers, even higher.

 

On the other end of the spectrum, we also recognise those developers who are in a privileged position to contribute larger equity amounts and are seeking lower pricing, particularly for BTR and PBSA schemes, where they need the serviceability to comfortably work.  In these scenarios where we can get the Net Debt Yield to an investment grade level, we are pricing interest margins from as low as 3.15%.    

 

Our clients don’t need to time the market because they see opportunities are out there and now as ever, our finance options are tailored to continue to support them.

Contact our team today to start your project.

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Biodiversity Net Gain Legislation marks a pivotal shift in residential development planning. Matt Tucker, Director, ESG and Construction.

On February 12, the introduction of Biodiversity Net Gain (BNG) legislation marked the biggest shift in planning regulations in decades. It mandates that developers ensure a biodiversity net gain of 10% for each development project. In practice this means that new developments must lead to a greater number of or higher-quality natural environments. Since the national planning policy framework already required net gains for biodiversity, BNG is not entirely new, but the conditions were previously patchy. BNG legislation aims to streamline and improve existing policies. The introduction of this policy has been hailed by the government as an ambitious government strategy to make sure the habitat for wildlife is in a better state than it was before development.

The rules are designed to protect England’s natural environment. But understandably, developers have voiced concerns that BNG is yet another requirement in already lengthy planning application processes that often appears to thwart the residential building we so desperately need.

BNG is a method of creating and improving natural habitats by ensuring that any development has a measurable positive impact (net gain) on the environment. Biodiversity is measured in ‘units’ using the statutory biodiversity metric, which considers the type, condition and size of a habitat to calculate its biodiversity value. Developers must determine how many units existed pre-development, how many were lost during construction and how many are needed to achieve a net gain.

Developers will need to create a biodiversity gain plan outlining how they will achieve a BNG, which must be approved by local planning authorities before building work begins.

Preparing for BNG: are builders and developers ready?

Notwithstanding the good intentions of the scheme, as with so much in planning, the timing could have been better. At a time when developers are like many facing challenges over the cost of build and buyer affordability; some developers understandably view them as another hurdle on the track of housing targets. Others argue that leaving a site in better condition post-development may not always be feasible or commercially viable. All of this needs to be considered in the light of a drastic undersupply of new homes too.

There are three ways to achieve the Biodiversity Net Gain to facilitate action more quickly:

·       On-site. Improve biodiversity on the development site, such as by installing birdboxes, preserving mature trees or letting areas grow wild.

·       Off-site. Create biodiversity on land you own elsewhere. Alternately, buy biodiversity units from another landowner.

·       Statutory biodiversity credits. Purchase statutory biodiversity credits from the government to fund habitat-creation in England.

These steps must be followed in order, with the last resort being purchasing credits from the government. Importantly, habitat improvements must be maintained by the landowner for 30 years, representing an ongoing responsibility.

While this may increase project costs – if approached in a positive way, there will be opportunities to enhance the end product and potentially increase the values.

The cost to developers will vary depending on the characteristics of their development and whether biodiversity activities are being undertaken on or off-site. For on-site biodiversity, developers will need to allocate land for habitat enhancement, potentially reducing the available space for housing and further impacting the profitability of the site. Additionally, any habitat created will need to be maintained by the landowner for 30 years, meaning an increase in operational costs. Other costs to consider include staff training to ensure compliance and the alteration of work schedules to build around optimum timings for habitat creation.

While these challenges at face value appear to hamper new build efforts; the fact is that they are now law and, we believe, some of these costs may be recouped in increased prices..

Anecdotally, many of our borrowers and their sales agents are advising that homebuyers are increasingly seeking more sustainable housing product, which means BNG may further enhance the premium that new homes command. Finally, developers that join the BNG market as sellers of off-site units may be able to generate a new revenue stream while helping to preserve the natural environment.

For developers, a couple of things are clear. Before development can commence, they will be required to obtain the LPA’s approval of a biodiversity gain plan demonstrating how the development will deliver a BNG of 10% and ensure this is maintained for a minimum of 30 years.

Secondly, it is unlikely this is the end of these kinds of requirements. BNG is one part of a growing movement to increase the emphasis placed on the natural environment. There will undoubtedly be further regulations seeking to protect and enhance the natural environment in coming years.

For now, however, BNG is about making a positive contribution towards sustainable development. While market rebalancing takes time, these legislative changes may prove to be an opportunity. Developers and their brokers should know that financing these projects is still entirely possible and that there are opportunities to secure better terms with the right lenders.

At Pluto Finance, we incorporate Environmental, Social and Corporate Governance (ESG) factors into our investment analysis and decision-making processes, and we make a point of supporting developers who have a focus on sustainable development. This is demonstrated by our Low carbon lending product, whereby we fund developers and offer financing cost discounts to those who can implement whole life carbon reduction strategies to deliver housing beyond the current status-quo.

The future of residential development planning needs innovative strategies from lenders like ourselves in order to ensure the future of legislation changes like this can be sustained in the future. We like to think we are leading the charge on that.

If you want to find out more about our low carbon lending product,
contact Matt today via email mtucker@pluto-finance.com 

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Pluto Finance successfully closes £60m loan for Signia Living for their Sydney Road development

Pluto Finance, a leading provider of property finance, is pleased to announce the successful closing of a residential development loan to support a new housing development, Sydney Road, in Watford.

 

The client, Signia Living, is a property developer based in Harrow, North London with an extensive portfolio in and around North West London.

 

Pluto Finance have provided a £60 million residential development loan, for the development of 231 new build residential units and 120 parking spaces. The developer’s intended strategy for this scheme is fluid, and Pluto’s loan structuring allows the borrower to pursue numerous approaches for the scheme in the future.

 

Pluto Finance have worked with Signia on numerous occasions, ranging from small bridge loans starting from £8.0m, to this £60m transaction. This illustrates the full range of loan sizes that Pluto can facilitate and commitment to supporting borrowers at every stage of their growth, and underlines Pluto Finance’s expertise and understanding of different approaches to lending, ensuring the borrower can align the bespoke financing with their plans.

 

Mario Ioannides, Partner at Pluto Finance, commented: “We are delighted to support our good friends at Signia Living with this development. At Pluto Finance, we are continually partnering with developers that contribute essential housing supply to the local market, and we firmly believe that this latest development will yield significant advantages for the community.”

 

Dhiraj Dabasia, Director of Jaysam Contractors and Head of Development at Signia Living commented: “Sydney Road, Watford is an important regeneration development in Watford and with the support of Pluto Finance, we are able to deliver over 200 new homes and continue our plans for delivering high quality development schemes across North and West London. We have worked with Pluto Finance now on a number of developments due to their expertise and thorough understanding of the market, and this is something we look to continue with as the size of our development schemes continue to grow.”

If you want to find out more on how we can help you with your next project,
contact our team today via email info@pluto-finance.com 

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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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