Peer-to-peer property lender Invest and Fund has deepened its partnership with Homes England and will now offer property development loans of up to £4m to British borrowers.

The loans will have a maximum of 70 per cent gross development value, and 85 per cent loan-to-cost. The partnership is expected to lead to the construction of 600 new homes. To date, Invest and Fund’s partnership with Homes England has led to the creation of 107 new homes.

In 2020, Homes England entered into a seven-year partnership with Invest and Fund to increase the amount of finance available to small- and medium-sized enterprise (SME) property developers. The collaboration created a £25m revolving fund with loans offered up to the value of  £2.5m, at up to 80 per cent loan-to-cost.

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The refinanced agreement will increase the fund from £25m to £47.5m, and extend the term of the fund to March 2030.

“Small and medium housebuilders play a vital and essential role in driving the delivery of new homes where they are needed most,” said Marcus Ralling, chief investments officer at Homes England.

“This refinancing demonstrates our ongoing commitment to supporting the small builders that are crucial to building a diverse and resilient housing sector. By nearly doubling the fund and extending its availability, we’re providing sustained, long-term support to help SME developers grow and deliver more homes at pace.”

Invest and Fund has been a long-time supporter of SME housebuilders in the UK. In a recent blog, the P2P lender said that SME homebuilders are typically more agile and innovative than large developers, enabling them to tackle smaller, overlooked plots of land unsuitable for large-scale projects.

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“These smaller parcels, often scattered across urban and suburban areas, collectively represent a substantial opportunity for housing growth,” the blog added. “By developing these sites, SMEs can contribute to incremental yet impactful increases in housing supply.”

Robert Burgess, chairman at Invest and Fund welcomed the extension of the Homes England partnership, saying that the company is “delighted to be working with Homes England to support SME developers and ensure that they have access to vital funding to deliver much-needed new homes across the country.”

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