A £4.5 million injection of revolving development finance from Paragon Development Finance has sealed the deal for a new housing scheme at Riverside Sunderland, paving the way for the construction of 34 new homes across two phases on the site of the former Vaux Brewery.
The project, spearheaded by igloo, will feature a mix of townhouses, maisonettes, and apartments, with a focus on modern methods of construction through its 'Footprint' process. The first phase will see 18 townhouses and maisonettes built in a residential cluster within the Vaux neighbourhood, while the second phase will deliver 16 apartments inspired by concepts from the government's 'Homes of 2030' competition.
This development is a key component of the Riverside Sunderland regeneration masterplan, which brings together Sunderland City Council and the Housing Growth Partnership. The ambitious plan includes not only new homes but also workspaces, leisure facilities, and public green spaces, aiming to create a thriving urban community. Paragon has confirmed that the scheme will meet its Green Homes Initiative criteria, requiring at least 80% of private units to achieve an EPC A rating, with the remaining homes meeting a minimum EPC C standard. This qualification allows for a 50% reduction on loan exit fees.
As the UK property market continues to navigate regional disparities in growth and affordability, such targeted investments are crucial. Sunderland's North East location remains resilient, driven by regeneration projects and relatively lower entry prices compared to the South East. Mortgage rates have stabilised somewhat, but still impact affordability nationwide, with a typical 5-year fixed rate hovering around 4.5-5.0%. Data from Rightmove and Zoopla highlights these regional disparities in price growth and rental yields.
This collaboration between Paragon and igloo marks their second joint project, following the Dundashill scheme in Glasgow. The Sunderland deal is also part of Housing Growth Partnership's strategic partnership with PFP-igloo, aiming to deliver over 1,200 homes across regional UK cities through a tailored financing structure designed to support phased delivery.