Arc & Co. has successfully secured a £3.4 million buy-to-let facility from Quantum Mortgages on behalf of a developer in Worthing, enabling them to retain part of a larger residential conversion while refinancing existing debt.
The developer had originally purchased a former office building in Worthing and transformed it into a block of 120 residential flats. The acquisition was initially funded through a combination of bridge and mezzanine finance, which required repayment as the project progressed.
In response to slower sales in the housing market, the developer adopted a new approach – holding back 16 of the completed flats as a buy-to-let investment to generate ongoing rental income rather than disposing of the entire scheme.
Of the 16 retained units, 8 were already pre-let, providing immediate rental returns and mitigating letting risk. To facilitate the revised strategy, the developer transferred the 16 flats into a dedicated SPV through new lease arrangements and sought a BTL facility that would refinance the outstanding debt while maintaining a suitable loan-to-value ratio.
Gareth Briggs, Head of Residential UK at Arc & Co., oversaw a revaluation of the retained units, resulting in an updated assessment that supported the leverage required. This step proved crucial in achieving financing terms that worked for the client, particularly with a Net LTV of 74%.
This transaction has enabled the developer to repay the previous bridge and mezzanine lenders in full, simplify their capital structure, and retain a self-contained 16-unit portfolio ready to generate income as market conditions evolve. The SPV structure helps isolate exposure and provides a robust foundation for efficient long-term management.
“It was a pleasure working with Gareth from start to finish on this deal, whereby the applicant was looking for a guaranteed exit on a large development.
“As is the case with multiple units involved, there were many moving parts but nothing, through the assistance of the broker, valuer and conveyancer, we could not overcome.
“Overall, a great outcome for all parties, and I look forward to Quantum and Arc & Co. doing more business in the immediate future.” — Zouhair Mihramane, National Account Manager, South East & West, Quantum Mortgages
“This deal underscores how measured structuring and alignment between lender, adviser and sponsor can unlock value even when exit conditions are difficult. Quantum were supportive throughout, and we’re pleased to deliver a solution that balances security and flexibility for our client.” — Gareth Briggs, Head of Residential UK, Arc & Co.
