Avamore Capital Completes Circa £620k Low Rate Development Facility

Avamore Capital, the specialist bridging and development lender have completed a low rate development loan of £620k in a second deal finalised with the broker Rapid BF. The loan made to two local developers, was provided for the acquisition of a plot of land in Luton, Bedfordshire. Plans are in place for the construction of 4x four-bedroom houses with a forecast GDV of circa £1.6m.


Regarded as one of the south-east’s property hotspots, Luton enjoys a wealth of transport communications, strong local employment opportunities and relatively affordable housing, a stark contrast to southeastern averages.



The developers, who are tradesmen by training, had limited experience in property development although had substantial knowledge and understanding of construction. Avamore was reassured through of their level of experience from their monitoring surveyor, Toby White from Jones Lang LaSalle (“JLL”), who noted that the borrower’s construction experience would enable them to deliver the scheme without too much difficulty as developers.

Adding to the complexity of the deal, the developer had already commenced construction, which many lenders would not have been willing to accept. However, Avamore saw this as a strength as the site was affected by a substantial slope, which added additional risk in terms of ground works and cost over-runs. Many of the usual construction risks in new build development come from the ground works, so to have these predominately completed and de-risked, meant from a funding perspective was seen by Avamore as a positive.


Zuhair Mirza, Principal Avamore Capital said: “We are delighted to have been able to assist with funding the borrower’s development in Luton. The scheme will deliver family housing at an affordable level for the local market, something which Avamore Capital greatly encourages. Despite the borrower’s not having a huge amount of experience as developers, we knew they had the capability as builders and we are confident of their ability to perform when it comes to developing the property. Avamore as a company want brokers and customers to know that we aren’t afraid of inexperienced developers as long as they have the right support on the project management side or have sufficient experience as builders. We are committed to helping tackle the housing crisis by providing the funds developers desperately need to build properties. Lenders being unwilling to lend to inexperienced developers only fuels the current housing crisis and Avamore are of the view that everyone has to start somewhere”



Amit Majithia, Principal at Avamore added: “The number of smaller housebuilders has nosedived over the last 20-30 years and this has shown to be a huge contributing factor towards the fall in housing completions during that time. Big housebuilders have an ability to land bank sites and sometimes justifiably, control the local market, a luxury that smaller developers do not have – these developers have to get on and build sites out as soon as they are acquired. Funding small developers on this scheme might only build 4 homes, but in the long run their business could build thousands of homes over 20+ years.”

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