Northumberland developer secures first North East property fund loan
A Northumberland developer has become the first business to
secure backing from a new £10 million property fund aimed at
supporting smaller-scale North East construction and property
Family-run firm W Brown & Son has begun work on building
four three-bedroom bungalows and the conversion of a former
builder's office into a three-bedroom cottage in its home village
of Thropton near Rothbury after receiving a £750,000 loan from the
North East Property Fund.
Conceived and managed by investment firm FW Capital, the North
East Property Fund was created in response to strong demand from
small and medium-sized (SME) construction and property
development companies who are unable to access mainstream
finance from traditional sources.
The fund is backed by Santander and the North East LEP, and
provides loans from £250,000 to £1 million for residential and
non-speculative commercial developments in Tyne & Wear,
Northumberland and County Durham.
The new development is the latest in a series of schemes that W
Brown & Son has built in Thropton, where it has been based
since being founded in 1913, and the properties are expected to be
ready for occupation early in the new year.
FW Capital was advised during the investment process by
Newcastle-based commercial law firm Square One Law, with further
due diligence provided by Foster Maddison and Elliott Projects
Andy Lowe, Project Manager at W Brown & Son, says: "The
owners of the site were looking to retire, and it seemed an ideal
location for us to further extend our presence in a community that
we know very well.
"We looked at a number of different financing solutions for this
scheme, and FW Capital's interest in it made them stand out as the
right option to take - the process of bringing in the loan went
very smoothly, while the cost makes economic sense.
"The North East Property Fund provides a good option for
smaller-scale developers like us to get projects moving that might
not otherwise attract the backing they need, and the opportunities
it provides are well worth investigating."
The North East Property Fund operates on a commercial basis, and
by reinvesting returns into future projects, it has the potential
to provide over £30 million of finance into smaller developers over
the next five years.
Joanne Whitfield, Fund Manager at FW Capital, adds: "The Fund
will help to tackle the growing need to build more homes across
Tyne & Wear, Northumberland and County Durham, which in turn
will help to drive further economic growth in these areas.
"This first project provides an excellent example of the sort of
smaller scale scheme that we're looking to get involved with around
the region, and we're pleased with the number of enquiries that
we've already had from North East developers with property schemes
that they want to see realised."
David Land, Investment Panel Chair at the North East LEP, says:
"Our focus is on driving economic growth and the North East
Property Fund is designed to kickstart and support small to medium
residential and commercial property developments by unlocking
finance. Profits will be reinvested helping to ensure the Fund’s
sustainability and enabling an increasing number of property
schemes to benefit over the coming years.”
Stephen Carmichael, Relationship Director at Santander, adds:
"I’m delighted to note the Fund’s first investment, and we are
confident that the good work being done by FW Capital to promote
and manage the North East Property Fund will lead to many more
Michael Shuker, partner in Square One Law’s property team, says:
“The implementation of this fund is new as it combines public and
private money benefitting North East based SME construction firms
and property developers, as well as contributing to the targets for
new homes contained in the North East Strategic Economic Plan. We
have enjoyed working with FW Capital to set up the fund and
implement the first investment.”
Businesses wishing to apply for investment from the fund should
contact Tony Cullen at FW Capital on 0191 269 6966, email Tony at
or visit www.fwcapital.co.uk for more