Hilltop to deploy up to £300m to fund UK house building, following backing from Metropolitan Real Estate

by | Mar 9, 2021

Hilltop has secured investment from Metropolitan Real Estate, the global real estate multi-manager platform. As part of this, Hilltop will target to deploy up to £300 million over the next three years to finance the construction of over 1,000 new residential units across the UK, with a focus on affordable regional markets with strong supply-demand fundamentals.

The investment provides Hilltop with an immediate opportunity to grow its existing UK residential development finance platform. An investment of this type is critical to achieving the UK government’s target of delivering 300,000 new homes per year.

Hilltop believes that UK residential development lending has fallen up to 40% since 2008, as high-street banks have withdrawn from the market due to new regulatory capital requirements and the impact of Covid-19. The UK could therefore face a funding gap of c. £200 billion that will need to be covered over the next decade in order to achieve the government’s housebuilding targets.

Hilltop is backed by global real estate investment firm, Round Hill Capital, and the firms’ combined expertise, industry knowledge and access to capital has facilitated the construction of 250 residential units across the UK to date.

The partnership with Metropolitan brings further institutional validation of Hilltop’s strategy and track record. Metropolitan committed c. £60 million in 2021 to purchase a portfolio of existing development loans across five regions and to continue funding the active pipeline. This commitment also demonstrates the strong appetite among institutional investors for the attractive risk-adjusted returns offered by residential real estate credit strategies.

Despite the challenging economic backdrop in 2020, UK residential property prices rose at their fastest rate in six years, as strong pent-up demand coincided with a slowdown in the supply of new housing, with more affordable regions outside of London showing the strongest performance.

metropolitan real estate logo

Paul Oberschneider, CEO at Hilltop Credit Partners, said: 

“I’m delighted to announce this partnership, which further establishes Hilltop as a leading player in the UK development lending market. Working with Metropolitan Real Estate will bring together our collective experience in real estate and credit to support proven housebuilders in the UK, and to promote greater housing supply. This partnership is a validation and recognition of our work so far, and we look forward to growing our lending portfolio across Britain this year.”  

Cherine Aboulzelof, Managing Director and Head of Europe at Metropolitan Real Estate, said:

“We are delighted to partner with Hilltop Credit Partners and Round Hill on this transaction. We are investing with an experienced team in an already seeded, and growing, portfolio of affordable residential loans that provides visibility and proof of concept in attractive locations with quality local sponsors. This opportunity provides our investors with access to the UK residential sector with an attractive risk-return profile for our fund.”

Interesting article? Put our experience to work…

Hilltop Credit Partners completes £18.3m loan for development of 86 residential units in New Waltham, Lincolnshire

Funds advised by Hilltop Credit Partners have completed an £18.3m loan to Yeung Property Group for a development of 86 residential houses...

Modular Construction Finance – A Sector For The Mainstream?

News broke recently about the real estate division of Investec providing a £10.8m debt facility for a modular student development in...

How The Planning Bill Will Shape Residential Property Development Lending

In May 2021, the Government unveiled the new Planning Bill, designed to be the most dramatic shake-up of UK...

4 Ways to Keep Your Property Development Finance on Track

The property development process can be complex, with complicated finance structures and multiple stakeholders. All these moving parts can...

3 Common Issues That Can Cause Drawdown Delays

Once you have your property development finance package in place and your scheme is progressing, it’s vital that you get your drawdowns on...

Is Outdoor Space More Important Than Indoor Space?

The coronavirus pandemic has transformed how we think about living space. Previously, many people prioritised location, such as proximity...

Regional vs London Property Markets – Performance and Outlook

In 2020, regional house prices in England rose 8.2%, their best performance in 15 years. This is double the 4.1% annual gain of the London...

The Trials And Tribulations Of The Mezzanine Finance Piece in the Capital Stack (Real-life Case Studies)

You’re a property development business building your capital stack. Your equity and senior are in place, and now you’re approaching...

Houses or Flats – What to Build?

In the UK real estate market, the rule of thumb is that you build flats in city centres and houses in suburban, semi-rural and rural...

4 Key Metrics to Stress Test when Assessing a Property Deal

The best development finance lenders will scrutinise your property deal when deciding whether to partner with you and what loan rates...

Traditional Development Finance Lenders vs Progressive Property Finance Partners? 5 Big Differences

In the 13 years since the global financial crisis, there’s been a dramatic change in property finance partners. Where once banks acted as...

As seen in...

Fintech Finance logo
Logo - CoStar
Logo - Business Leader
Logo - Development Finance Today
Logo - Real Estate Capital
Logo - CoStar
Logo - Business Leader
Logo - Development Finance Today
Logo - Real Estate Capital
Logo - CoStar
Logo - Business Leader
Logo - Development Finance Today
Logo - Bridging Loan Directory
Logo - Property Week
Logo - IPE Real Assets
Logo - Business Daily News

Register your interest here

 

Let’s talk! Get in touch on +44 (0) 203 903 6369 
or leave us a message below and we’ll get right back to you.

4 + 9 =

  • Share This