LendInvest Mortgages has announced a new development finance funding structure supported by HSBC and AB CarVal, designed to scale its proposition in the small and mid-sized residential development market.

The partnership launches with £175 million of senior capital committed by HSBC, alongside support from funds managed by AB CarVal and LendInvest. It evolves the lender’s existing institutional development finance arrangements into a larger and more flexible vehicle, enabling it to support a greater number of borrowers and a wider range of schemes.

The funding is structured as a separate account for LendInvest and is intended to scale as activity in the residential development market gathers pace.

LendInvest’s development finance platform has already funded more than 700 projects, supporting SME developers who often struggle to access fast and flexible capital from traditional lenders.

The new facility significantly increases the firm’s ability to serve this segment, providing a longer-term and more sustainable capital base.

The focus is on smaller schemes, with typical loan sizes between £1m and £5m. This part of the market is frequently underserved, as mainstream banks often lack appetite at this level while alternative lenders can find it difficult to scale.

LENDING MOMENTUM

The announcement follows the publication of LendInvest’s FY26 interim results, which reported lending growth of more than 20%, alongside improved operational leverage and rising profitability.

The new funding is intended to build on that momentum and support increased deal flow across development finance, which the lender sees as critical if the UK is to move closer to the delivery of 1.5 million new homes promised during the current Parliament.

Greater clarity on funding costs and improved visibility on construction input prices are also expected to support borrower confidence.

“ENDORSEMENT”

AB CarVal brings global experience in private credit and asset-based finance, including residential development lending, while HSBC has an established relationship with LendInvest in this sector. The lender said the partnership represents an endorsement of its credit discipline, origination capability and operational infrastructure.

Hugo Davies (pictured), chief capital officer and managing director of mortgages at LendInvest, said: “This partnership is an important milestone for our development finance franchise.

“AB CarVal brings deep expertise and significant firepower; HSBC brings the institutional strength and continuity that has underpinned our success to date. Both bring a deep history of supporting SME developers.

“Together, this creates a sustainable, long-term funding framework designed specifically for the SME developers who deliver the homes the UK urgently needs.”

Victoria Lindsell, global head of structured finance at HSBC, said: “LendInvest continue to demonstrate their ability to originate and manage a strong portfolio of development loans within the UK market.

“HSBC are pleased to continue our partnership with LendInvest and to support them in the next phase of their ambitious growth plans alongside AB CarVal.”

Robert Sinclair, managing director at AB CarVal, added: “We are delighted to be partnering with LendInvest and their development finance team on this funding.

“Together with HSBC, this structure creates a compelling opportunity to scale and enhance our existing track record of investment into segments of the UK housing market where demand continues to outpace supply.”