Sourced Capital recently announced the closing of its most current deal, which will be used to fund a development loan of two luxury new-build residential properties in Cuddy Hill, Preston.
Both properties are set to be substantial in size with high-end fittings. Plot one, which is 5,300 square feet in size, will also feature an indoor swimming pool.
The loan will be used to fund associated build costs and for the purchasing of the quarter of a hectare plot. It has a term of 18 months to accommodate the development and sales period, which also includes a loan to gross development value of 61%.
Derek Pratt, Commercial Director at Sourced Capital, said: “We are delighted to be working very closely with the developer on this exciting project and we look forward to seeing these two luxury properties come to life over the next 18 months.”
“Over the last seven months, we’ve seen a notable increase in demand for these types of property investments and our most recent opportunities have helped to satisfy this demand amongst our qualified investors.”
An uptick in demand for investment projects
This is the second loan that Sourced Capital has funded in the last few weeks, the first being a £218,000 loan for the refurbishment of a four-bedroom house in Swansea.
There has been substantial demand for investments from Sourced Capital, which is directly authorised by the Financial Conduct Authority (FCA). Since the start of this year, Sourced Capital says it has originated more than £10 million in loans and expects to lend more than £22 million by the end of the year to small and medium sized developers across the country.
What's more, it says it has returned over £16 million of capital and circa £2.77 million of interest to investors since its inception in 2019, which has led them to now fund more than £32 million of loans for property developers across the UK.
Over the past there years, investors have achieved average returns of nearly 12% per annum, with investors able to select the property projects they with to invest in.
This type of investment isn’t for everyone since there is a risk of loss to investors’ capital, even with the loans benefitting from first legal charge security, as there is no protection from the Financial Services Compensation Scheme for this type of investment.
Sourced Capital says it will forge ahead to continue to increase funding for viable residential property developments in the UK, and with 'laser-focus' on more sustainable housing in particular.