Fiduciam provides £5.3m Recovery Loan Scheme facility for affordable retirement scheme


Recovery Loan Scheme

Fiduciam, the institutionally funded lender to housebuilders and entrepreneurs, has provided a £5.3m Recovery Loan Scheme facility for the development of an affordable retirement living scheme in East Anglia. The facility’s LTV limit is 75%.

The 30-unit development has an innovative concept combines horizontal living, such as bungalows, and direct access to outside space, with a tailored design that promotes independence in later life.

In particular, the developer assessed the plans for their suitability for people with dementia during the design process. A flexible community hub will provide a shared space that allows for social events and pop-up healthcare services.

The key challenge for Fiduciam’s credit team was to understand the sales constraints imposed on the completed units as a part of their being ‘affordable’.

These constraints include buyer location, income restrictions and unit sales prices capped at 80% of Open Market Value.

Fiduciam assessed that although these constraints reduced the pool of potential buyers, this was considered in light of the limited local supply of units in this market segment.

Additional comfort was gained through the staged nature of the development and the borrower’s advanced plans to secure pre-sales.

Martin Lee, case manager at Fiduciam, comments:

“This development is an exciting new concept for later life living which seems perfectly timed to meet the post-pandemic demand for outside space.

Our team at Fiduciam were able to draw on our previous experience of lending on care homes and assisted living accommodation to offer the most competitive terms and provide a workable solution for the borrower.”

Marc Morris, Underwriter at Fiduciam, adds:

“This case highlights Fiduciam’s ability to finance bespoke ground up developments.

The chief challenge was to understand the sale price discount and buyer restrictions imposed as part of the affordable designation and their impact on demand and liquidity for the completed units.

We applied our knowledge of the affordable housing and social care sectors alongside our development funding capability, and were then happy to lend, helping the developer to fulfil demand in such a much-needed area of the market.”