Paragon Development Finance has launched a dedicated funding product for the development of care homes, as the lender looks to support experienced operators and address growing demand for specialist accommodation across the UK.
The new facility offers terms of between 20 and 36 months, with a minimum loan size of £10 million, and is aimed at SME developers with a proven track record in the care sector.
It forms part of the FTSE 250 lender’s wider strategy to support specialist development markets where long-term demand fundamentals remain strong.
Paragon said the product has been designed specifically for experienced care home developers and operators, reflecting the complexity and capital intensity of modern care schemes and the need for lenders with an understanding of both construction and operational requirements.
The launch comes against a backdrop of mounting demographic pressure on the UK’s housing and care infrastructure. Office for National Statistics data published earlier this year shows England is projected to see average household growth of 242,000 per year between 2022 and 2032, with the fastest growth among households where the oldest person is aged 85 and over.
This age group is expected to increase by 42.3%, with most growth coming from single-person households, a trend likely to accelerate demand for smaller, accessible homes and specialist later living accommodation, including care homes, retirement housing and age-friendly communities.
The care home funding proposition follows Paragon Development Finance’s expansion into other specialist development sectors, including later living, build-to-rent and purpose-built student accommodation, where the division has now completed around 20 transactions. It also comes shortly after the lender increased its maximum loan size from £35 million to £60 million.
Neal Moy, managing director of development finance at Paragon Bank, said: “Our new care home product underlines our commitment to supporting SMEs, experienced operators and the UK’s expanding care infrastructure.
“Over half of our deals are made with repeat customers, reflecting our customer-centric ethos. This product launch is further evidence of our focus on building long-term, strategic partnerships with developers to ensure they have the right finance to deliver and thrive.”
Adrian Reeves, senior relationship director and lead for Paragon Bank’s care home proposition, said: “Care home schemes are complex and capital-intensive, requiring a lender that understands both the construction and operational challenges.
“By backing ambitious and skilled developers, we’re helping to deliver best-in-class care environments for communities across the country – demand for which will continue to grow for years to come.”
The new product builds on Paragon’s existing development finance track record. Since 2018, the bank has funded the delivery of more than 13,000 new homes. In the last financial year, Paragon Development Finance reported a 3% increase in new lending to more than £527 million, loan book growth of 8.6%, and a 31% increase in its new business pipeline.
Yoast SEO Focus Keyphrase:
Meta Description:
