A Northumberland developer is the first business to secure backing from a new £10m property fund aimed at supporting smaller-scale North East construction and property development projects.
W Brown & Son, a family-run fim from Thropton near Rothbury, has begun work on building four three-bedroom bungalows and the converting a former builder's office in its home village, after receiving a £750,000 loan from the North East Property Fund.
Managed by investment firm FW Capital, the North East Property Fund was created in response to strong demand from small and medium-sized (SME) construction and property development companies who are unable to access mainstream finance from traditional sources.
The fund is backed by Santander and the North East LEP, and provides loans from £250,000 to £1m for residential and non-speculative commercial developments in Tyne & Wear, Northumberland and County Durham.
The new development is the latest in a series of schemes that W Brown & Son has built in Thropton, where it has been based since being founded in 1913, and the properties are expected to be ready for occupation early in the new year.
Andy Lowe, project manager at W Brown & Son, said: "The owners of the site were looking to retire, and it seemed an ideal location for us to further extend our presence in a community that we know very well.
"We looked at a number of different financing solutions for this scheme, and FW Capital's interest in it made them stand out as the right option to take - the process of bringing in the loan went very smoothly, while the cost makes economic sense.
"The North East Property Fund provides a good option for smaller-scale developers like us to get projects moving that might not otherwise attract the backing they need, and the opportunities it provides are well worth investigating."
The North East Property Fund operates on a commercial basis, and by reinvesting returns into future projects, it has the potential to provide over £30m of finance into smaller developers over the next five years.
Joanne Whitfield, fund manager at FW Capital, adds: "The Fund will help to tackle the growing need to build more homes across Tyne & Wear, Northumberland and County Durham, which in turn will help to drive further economic growth in these areas.
"This first project provides an excellent example of the sort of smaller scale scheme that we're looking to get involved with around the region, and we're pleased with the number of enquiries that we've already had from North East developers with property schemes that they want to see realised."