Open for investment

Raised £324,929

DDF Property Bond - Series One

4.50% p.a.

Standard Rate

12-Month

Term

IFISA

Eligible

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Type Property

Asset-backed Yes

StatusDevelopment

Estimated loan-to-value N/A*

Capital is at risk and returns are not guaranteed. This is a 12-month Bond and is not readily realisable.

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, a Bond at 5.5% p.a. with a term of up to two years is also available. 

As at 30 June 2018, there are 14 loans secured on a first-charge basis that make up the Group's £38 million loan portfolio. These, in addition to the future pipeline of loans, are 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 loan-to-value/loan-to-gross-development value (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 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 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.

**When available the Prospectus and supporting product literature will detail exceptional cases where LTV/LTGDV may exceed 75%.

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About

Downing Development Finance plc heads a UK group of companies that originates and manages property loans. As at 30 June 2018, there are 14 loans, secured on a first charge basis that make up the Group's £38 million loan portfolio. These, in addition to the future pipeline of loans, are 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 eight years, funding over 60 projects across the UK. Downing has lent approximately £128 million of lending to SME, property development and asset-backed projects since October 2010, of which over £88 million has been repaid alongside over £7 million of interest. To date there has been two defaults in this loan book totalling around £0.2 million, equating to less than 0.2% of the total loans made. 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.

Towards the end of 2017 the government concluded that the annual housing need in England was 266,000 new homes per annum,1 whereas the housebuilding industry was producing only 210,000 new homes annually at this time2. The housing deficit caused by this lack of supply is driving demand in the housebuilding sector. With over half of small to medium-sized housebuilders saying access to finance is the second biggest barrier to building new homes,3 the group is seeking to help address this gap in funding.

1 Planning for the right homes in the right places: consultation proposals, Department for Communities and Local Government, 14 September 2017.

2 Spotlight: Residential Property Forecasts, Savills, Autumn 2017

3 Source: Federation of Master Builders, ‘FMB House Builders’ Survey 2017’, https://www.fmb.org.uk/media/35090/fmb-house-builders-survey-2017.pdf