Homes by Carlton are a luxury house builder delivering innovative, high-quality new housing developments across the North East of England.
They serve as MAVEN Bonds’ Strategic Housing Delivery Partner, and alongside Growth Capital Ventures (GCV) and Maven Capital Partners (MCP), make up the MAVEN Bonds advisory board.
After receiving funding for phase one of their Cathedral Gates scheme - based in Chilton, County Durham - from specialist lender FW Capital, confidence from the sale of 10 homes early in the development cycle meant that Homes by Carlton were able to accelerate their construction programme.
As the opportunity to begin phase two came earlier than initially anticipated, MAVEN Bonds were able to respond quickly and provide Homes by Carlton with a short-term development finance loan of £300,000 in order to fast-track the development of Cathedral Gates. The total time for the transaction to take place was just two weeks from initial enquiry.
Simon Lenney, Independent Chairman of MAVEN Bonds, said:
“This is exactly what MAVEN Bonds was set up to do - provide quick, alternative finance to experienced house builders and property developers whilst simultaneously providing our investors with the potential to earn much higher returns than those currently available through traditional investment routes.”
Originating high-quality transactions, having a deep understanding of each project, generating the best returns for investors and managing risk in the most robust manner possible are crucial to MAVEN Bonds. By lending to Homes by Carlton - a Strategic Delivery Partner - we are able to do so in a fast, effective manner.
From left to right: Norman Peterson, Non-Executive Director at MAVEN Bonds and Homes by Carlton; Simon Walker, Managing Director of Homes by Carlton; Simon Lenney, Independent Chairman of MAVEN Bonds; Craig Peterson, Non-Executive Director at MAVEN Bonds and Homes by Carlton; Michael Marram, Senior Site Manager at Homes by Carlton.
Returns from the Cathedral Gates loan - as with all MAVEN Bonds loans - were generated by charging the developer a combination of loan interest and fees. This included an arrangement fee, a margin on interest, and an exit fee.
Typically, arrangement and exit fees are around 1% to 1.5%, depending on market conditions. The margin on interest will usually be 2% to 3% over the cost of funds.
The origination process
The Homes by Carlton land team have extensive relationships throughout the North East with land owners and land agents, and will look at approximately 100 potential sites per year, before picking around five of the very best.
Those sites will be chosen based on several components, including:
Homes by Carlton’s schemes are often smaller and more exclusive than those of larger, national house builders - with, usually, around 50 units or less.
Each potential site will, first and foremost, be assessed by the Homes by Carlton team. There are three stages of appraisals carried out, including a valuation from a RICS qualified valuer. The final investment paper is then presented to the MAVEN Bonds investment committee. If the scheme meets MAVEN Bonds’ strict lending criteria, Simon Lenney, as Independent Chairman, will approve the transaction.
Cathedral Gates is situated in a convenient location with easy access to the A1(M). This means Durham, Darlington and all major North East towns and cities are within easy reach.
The Deakin house-type at Homes by Carlton’s Cathedral Gates development in Chilton, County Durham.
The Canterbury house-type at Homes by Carlton’s Cathedral Gates development in Chilton, County Durham.
The Chester (CoreHaus) house-type at Homes by Carlton’s Cathedral Gates development in Chilton, County Durham.
There are a total of 14 units on the development, and they comprise a mix of three and four-bed detached and semi-detached homes.
With 8 of the 14 homes already sold to a housing association, Cathedral Gates is mixed-tenure, consisting of both private sale and rent-to-buy units - chosen to meet the demands of the area.
The development of Cathedral Gates has made a positive impact in many ways, and has provided a number of social, economic and environmental benefits.
The project facilitated the introduction of CoreHaus, an innovative part-modular housing solution developed in conjunction with Fusion21.
CoreHaus uses tried and tested modern methods of construction in an innovative way to:
Reduce build costs
Reduce construction waste
Speed up the construction programme
Create new job opportunities on and offsite
Increase the delivery of high-quality affordable homes
CoreHaus in progress at Cathedral Gates.
CoreHaus in progress at Cathedral Gates.
Cathedral Gates is drawing families and professionals to an area that continues to transform. The site is located in a prominent position on the main high street and was formerly a petrol filling station. Homes by Carlton has fully remediated and redeveloped this brownfield site which has significatly enhanced the area.
The creation of local jobs - as well as the opportunity to train the workforce in new, modern methods of construction because of CoreHaus - has been key.
The aforementioned mixed-tenure nature of the development has meant that, not only has beautiful, affordable housing been delivered, but the scheme also provides those who may ordinarily struggle to get on the housing ladder access to high-quality homes.
The Deakin, Abbey and Canterbury house-type interiors.
The development finance package provided by MAVEN Bonds has been crucial in supporting Homes by Carlton in establishing themselves as an important provider of quality housing across the North East. Homes by Carlton now has a development pipeline of over 300 new build homes with a Gross Development Value of over £60 million. The lending team are looking forward to supporting Homes by Carlton on forthcoming schemes.
The MAVEN Bonds IFISA provides investors with access to fixed term investments by generating projected tax free returns of up to 7.75% per annum from making secured loans available to experienced companies within the UK property sector.
To find out more, download the MAVEN Bonds brochure.
The MAVEN Bonds product is available exclusively to experienced investors who are classified as either sophisticated investors, high-net-worth individuals or professional investors and have the knowledge and experience to make their own investment decisions. Investments are high risk and illiquid, your capital is at risk and returns are not guaranteed. Bonds are not protected by the Financial Services Compensation Scheme (FSCS).