Boutique investment firm Finndon Group announced today its plans to launch an alternative property fund aimed at helping small to medium sized property developers gain access to the mezzanine and preferred equity finance.
According to the firm, the property lending fund has an opportunistic strategy to fill the void in the UK’s fragmented property rental market. It will partner with developers who are looking to build affordable multi-family homes which will increase the supply of new properties and help ease the housing crisis.
Finndon Group will target net fixed rate bonds of 09% per annum on loans between £1m and £10m, with typical loan terms ranging from 6-18 months.
John Swift, Director, and Founder of Finndon Group said: “This is a great opportunity for not only investors but for Briton, as we look to capitalize on the supply and demand issues we face as well as help build high quality, affordable housing for young families.”
The private rental sector (PRS) is estimated to worth around £900bn and is likely to grow by 24% by 2021, which means one in four in the UK will be renting a home rather than owning one. There has been an increase of 2.5 million rental homes since 2000, and the Private Rental Sector (PRS) now ranks as the second biggest tenure in the UK housing market and is only set to rise. The Private Rental Sector (PRS) has doubled in the last 10 years, and it is expected to continue to grow to 5.79 million households.
Most (PRS) developments tend to be in urban locations that benefit from good local transport links which are perfect for young professionals. These developments are in areas with strong employment rates and low-land values, and the (PRS) isn’t just for the younger generations who mostly have to rent because of rising house prices.
A record 1.13 million-over ’50s are also renting from landlords, up from just 651,000 a decade ago. Between January 2011 and July 2018 rents have increased nationally by 16% which was driven by growth in private rental prices within the London boroughs. When we remove London from these figures, private rental prices increased steadily by 12.6% over the same period.