There’s been a noticeable uptick in the use of structured investments across UK property sectors, particularly in build-to-rent schemes, student accommodation, hotels, and traditional residential developments. But what’s driving this renewed interest?
One major factor is the need for more flexible finance. Traditional bank lending remains cautious, especially for early-stage projects or developers without an extensive track record. At the same time, investors—particularly high-net-worth individuals and private funds—are actively seeking alternatives to low-yield environments, and these property-backed investment opportunities offer a compelling proposition.
From the developer’s perspective, this type of finance can be drawn down in stages, aligned with the project’s progress. It can be secured or unsecured, tailored in terms of repayment, and allow for deferred interest to ease cash flow during construction. These features make it highly adaptable across various project types and timelines.
For investors, these opportunities provide a way to participate in property development without taking on the risks associated with equity positions. A fixed return, often secured against the underlying asset, provides a clearer exit strategy and a defined risk profile. Repayments are typically tied to project completion, when a development is sold or refinanced—making it an attractive short-to-medium-term option.
As the property finance landscape continues to evolve, these investments are bridging the gap between developers seeking capital and investors looking for structured, asset-backed opportunities. It’s a space that’s only set to grow.
Interested in investing?
Loan notes could offer you fixed returns, asset-backed security, and a clear exit strategy-providing a flexible and structured way to get involved in property development without taking on the risks of direct ownership.
