DDF Property Bond - Series Four

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

4.5% p.a.

Fixed return

7 mths

Term (Up to)

This is an opportunity to lend to the DDF Group for up to one year at 4.5% p.a. The Group has a loan portfolio of over £52 million spread across 21 developments and has raised over £5.5 million of debt across the bond programme as at 22 February 2019. Read more.

Raised: £2,046,294
Tranche 6 closes

Project

This is an opportunity to lend to Downing Development Finance plc, a UK group making property development loans, and earn 4.5% p.a. on a Bond with a term of up to one year. Alternatively, Series Three and Five are also available at 6% p.a. for a term of up to three years and 5.5% p.a. for a term of two years respectively. 

As at 31 January 2019, there were 21 loans secured on a first-charge basis making up the Group's c. £52 million loan portfolio and the weighted average loan-to-value/loan-to-gross-development value (LTV/LTGDV) at this date was 64%. The loan book is focussed 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, 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

Downing Development Finance plc heads a UK group of companies that originates and manages property loans. As at 31 January 2019, there are 21 loans secured on a first-charge basis that make up the Group's c. £52 million loan portfolio, the weighted average loan-to-value/loan-to-gross-development value (LTV/LTGDV) at this date was 64%. The loanbook is focussed 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 70 projects across the UK. Downing has lent over £190 million of lending to SME, property development and asset-backed projects since October 2010, of which over £112 million has been repaid alongside £9 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 – Investment Director. 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.

In the 2017 autumn budget, the Government stated its ambition for housebuilding to reach 300,000 homes per year. However, the annual delivery, as of Autumn 2018 was 217,000 per year1. The housing deficit caused by this lack of supply is driving demand in the housebuilding sector. Almost half of small to medium-sized housebuilders said access to finance is one of the biggest barriers to building new homes. An equal amount stated that they were involved in sites that were stalled for financial reasons.2 The Group is seeking to help address this gap in funding.

1Source: Residential Property Forecasts, Savills Research, Autumn 2018.

2 Spotlight: Federation of Master Builders, ‘FMB House Builders Survey 2018’.