DDF Property Bond - Series Eight

Capital is at risk and returns are not guaranteed.

Fixed term Bonds are not readily realisable and investors should expect to hold them for the full term.

Fixed rate Bond
Asset-backed
IFISA eligible

5.5% p.a.

Fixed return

2 yrs

Term (Up to)

This is an opportunity to lend to the DDF Group for two years at 5.5% p.a. The Group has a committed loan portfolio of over £82 million spread across 28 developments as at 30 June 2019 and has raised over £17 million of bond finance. Read more.

Raised: £862,861
Tranche 2 closes

Project

This is an opportunity to lend to Downing Development Finance plc, a UK group making property development loans, and earn 5.5% p.a. on a two-year bond. Alternatively, Series Seven and Nine are also available at 4.5% p.a. and 6% for terms of one and three years respectively.

As at 30 June 2019, there are 28 loans secured on a first-charge basis that make up the Group's c. £82 million committed loan portfolio, the weighted average loan-to-value/loan-to-gross-development value (LTV/LTGDV) at this date was 65%. The loan book is focused on residential development, bridging finance, non-speculative commercial development and funding for trading businesses seeking to develop their premises.

The Group, through its wholly-owned subsidiary Downing Development Lending Limited, takes a first charge over the land, buildings and assets of the company undertaking the development.

The weighted average LTV/LTGDV of the portfolio is capped at 70% and no individual loan can exceed 75% LTV/LTGDV*. This provides a buffer before Bondholders’ interest and capital are put at risk.

We recommend you carefully read the Prospectus and supporting product literature (when made available), to understand the nature of the risks involved in property development, the criteria by which the Group lends to developers and the level of due diligence undertaken.

No LTV/LTGDV is provided for the Bond itself, as the value of the Group’s assets varies too frequently for this to be accurately estimated for Bondholders over the period of the raise. The weighted average LTV/LTGDV across the loanbook and the borrower interest rate are published monthly on the updates tab.

*The Prospectus and supporting product literature details exceptional cases where LTV/LTGDV may exceed 75%.

About

Housing stock in England is not growing at the rate that the population and demographics require. The government is determined to fix the broken housing market. Building more homes in the right places is critical to unlocking productivity growth and makes housing more affordable. At Autumn Budget 2017, the government set out a comprehensive package of new policies to raise housing supply by the end of this Parliament to its highest level since 1970, on track to reach 300,000 a year.However, the housebuilding industry is failing to meet this demand, producing just 179,000 new homes per year in England.2 House prices are forecast to rise across the UK, despite the impact of Brexit uncertainty, the recent interest rate rise and projected future interest rate increases2. This growth has been supported by the government through its abolishment of Stamp Duty Land Tax on properties less than £300,000 for first-time buyers.3 .

Downing Development Finance plc heads a UK group that originates and manages property loans. As at 30 June 2019, there are 28 loans secured on a first-charge basis that make up the Group's c. £82 million loan portfolio, the weighted average loan-to-value/loan-to-gross-development value (LTV/LTGDV) at this date was 65%. The loanbook is focused on residential development, bridging finance, non-speculative commercial development and funding for trading businesses seeking to develop their premises.

The group is managed by Downing LLP, an investment manager with over £1 billion in funds under management. Downing managed funds have been lending to property development and asset-backed projects for over eight years, funding over 80 projects across the UK. Downing managed funds have been lending to UK asset backed and property development projects since October 2010, funding over 80 opportunities across the country and lending over £240 million to small and medium-sized enterprises (SMEs). Of this, over £128 million has already been repaid alongside more than £10 million of interest. Please note, past performance is not a reliable indicator of future performance.

 

The group is supported by Downing’s property and lending team including:

  • Jonathan Boss – Partner and Head of Lending. Jonathan has 20 years’ experience in the industry and has led around 100 transactions.
  • Parik Chandra – Partner and Head of Residential Development Finance. Parik joined Downing from p2p lender Funding Circle where he was director of real estate finance. During his time with Funding Circle, he originated over £100 million in loans.
  • John Pilbeam – Construction Director. John is a chartered surveyor with a focus on property development project management and has worked across our asset-backed and energy investment teams helping to manage construction risk.
  • John Pollington – Investment Director. John is responsible for sourcing new residential development deals with loan sizes between £1 million and £10 million. John has spent around 15 years funding small to medium sized housebuilders across the UK, with projects ranging in size from a few houses up to 100 unit schemes.
  • Richard Lamb – Investor Director. Richard has over 18 years’ experience in the sector and 30 years of banking experience overall, having previously held roles at Octopus Property, Triodos Bank, Unity Trust Bank, Clydesdale Bank and Barclays.

2017 Autumn Budget, page 3 “Building the homes our country needs”

Residential Forecasts Find The Gap, JLL, October 2018, page 6

32017 Autumn Budget, page 64 “Homeownership”