Yorkshire-based housebuilder Newett Homes has secured a £5.45 million revolving loan facility from Paragon Bank to support its newbuild development in Emley, Huddersfield.
The scheme will consist of 40 homes, including eight affordable properties, ranging from two-to-four bedrooms.
The revolving loan facility has assisted Newett Homes in purchasing the land on Wentwoth Drive and will support the development costs for the scheme as it progresses.
Revolving loans are utilised by experienced housebuilders to recycle funding as the initial tranche of properties are sold. Under the finance structure with Paragon, Newett Homes will be able to borrow a total of £7.8 million during the term of the agreement, and a maximum of £5.45 million at any one time.
Ground is expected to be broken in November, with the first houses expected to be ready by Autumn 2024.
Newett Homes is a jointly owned business by David Newett and his youngest son Will Newett. It focuses on building high-quality family houses across the Yorkshire region and has ambitions to build more than 400 homes annually across the region.
This is Paragon’s second deal with Newett Homes having previously supported the company’s 68-unit development in Fenay Bridge, Huddersfield last year. The deal was led on behalf of the bank by Senior Relationship Director Simon Dekker with support from Senior Portfolio Manager Craig Seabourne and Portfolio Manager Izzy Sargent.
Will Newett, Newett Homes Chief Executive, said: “We have built a strong relationship with the team at Paragon, so we are pleased to have worked with the bank on our latest development, which will deliver high-quality family homes to the Emley area of Huddersfield. We’re excited to break ground on the scheme and look forward to welcoming the first residents next year.”
Paragon’s Simon Dekker added: “We focus on working with experienced housebuilders that deliver a quality product and Newett Homes fits that mould perfectly. The company specialises in properties that deliver that added touch, including properties designed to impress and quality finishing touches.
“Paragon is one of a handful of development funders that can offer a revolving loan facility. This supports the developer by reducing the amount of equity they need to put into a scheme upfront and enables them to use the sale of the initial tranche of homes to pay down the facility as and when they complete, recycling their equity over the course of the project. This can decrease the overall amount of borrowing required and, subsequently, the cost.”
