Paragon Development Finance Backs £20m Sustainable Residential Scheme in Broughton

In a significant move for the North West’s residential property sector, Paragon Development Finance has announced an £8.8 million funding facility to support the Oakwood Group in delivering a major new housing development in Broughton, near Preston. The project, which carries an estimated gross development value (GDV) of £20 million, aims to address regional housing demand while setting a high benchmark for energy efficiency in modern construction.

The 51-home development, situated on Garstang Road, will be executed by Oakwood Construction (Northern) Ltd, the group’s in-house construction division. The project represents a strategic addition to the local housing stock, incorporating a mix of private residences and 20 units specifically designated as affordable housing, aligning with local planning mandates and addressing the urgent need for diverse housing tenure in the Lancashire region.

The Financial Architecture: Sustaining Regional Growth

The £8.8 million facility provided by Paragon covers both the acquisition of the site and the subsequent construction costs. This transaction is not an isolated event but rather the latest iteration of a well-established partnership between the two entities. Paragon and Oakwood Group have previously collaborated on successful developments in Ormskirk, Lancashire, signaling a high level of institutional confidence in Oakwood’s operational capabilities.

The funding structure is particularly noteworthy for its integration with Paragon’s "Green Homes Initiative." Under the terms of this scheme, developers receive a reduction in loan exit fees if their projects meet rigorous environmental standards. To qualify, at least 80% of the private homes must achieve an Energy Performance Certificate (EPC) rating of ‘A,’ with the remaining properties required to hit a minimum of an EPC ‘C’ rating. The Broughton project has been designed specifically to meet these criteria, underscoring a commitment to sustainable development that aligns with the UK’s broader Net Zero targets.

Strategic Location and Market Context

Broughton is increasingly viewed as a premier residential hub within Lancashire. Located approximately four miles north of Preston, the village provides a compelling proposition for commuters and families alike. The site’s location offers seamless access to the M55 and M6 motorways, providing vital connectivity for those traveling to Manchester, Blackpool, or further afield.

Beyond infrastructure, the site’s appeal is bolstered by its proximity to essential amenities. Crucially, the development sits within walking distance of Broughton High School, an institution that has maintained an "Outstanding" Ofsted rating since 2022. This educational proximity is a primary driver for family-led demand in the area.

However, the launch of this development occurs against a backdrop of national economic complexity. The UK property market continues to grapple with viability challenges that threaten to undermine housing delivery targets. Increased construction costs, fluctuating interest rates, and the ongoing struggle for housing affordability have created a testing environment for developers. Despite these macroeconomic headwinds, the Oakwood Group’s project serves as a case study for how developers can maintain viability by focusing on high-quality, energy-efficient homes that cater to the specific needs of the local market.

Chronology of Development: From Planning to Execution

The path to breaking ground at the Garstang Road site has been a rigorous, multi-year process.

• Early Planning and Acquisition: The initial phase involved navigating the complexities of local planning requirements, ensuring the project met the necessary standards for mixed-tenure housing.
• Funding Negotiation: Paragon Development Finance and Oakwood Group entered into discussions regarding the financial facility, with a focus on ESG (Environmental, Social, and Governance) targets.
• Operational Readiness: The appointment of Oakwood Construction (Northern) Ltd ensured that the project would be delivered with internal oversight, minimizing supply chain risks.
• Construction Phase: With the £8.8 million facility secured, the project has now moved into the active construction phase, with a clear roadmap for delivering the 51 units.
• Future Milestones: The anticipated timeline includes the phased delivery of homes, with the integration of energy-saving technologies occurring during the final stages of the build.

Technical Specifications: The ‘Green’ Standard

The Broughton development is defined by its focus on future-proofing residential assets. The technical specifications represent a departure from traditional build standards, focusing heavily on thermal efficiency and renewable energy.

Each property is equipped with:

• Enhanced Thermal Envelopes: High-performance insulation installed throughout floors, walls, and roofs to minimize heat loss.
• Advanced Glazing: AAA-rated double-glazed windows, which provide superior acoustic and thermal performance.
• Energy Management: High-efficiency, energy-saving combi boilers designed to reduce operational costs for homeowners.
• Renewable Integration: The inclusion of solar panels is a central feature, allowing residents to generate clean energy on-site.
• Infrastructure for Mobility: Every home is fitted with electric vehicle (EV) charging points, future-proofing the development for the anticipated transition to electric transport.

These specifications are not merely aesthetic; they are designed to reduce the "performance gap" often found in new builds, ensuring that the properties are genuinely affordable to run in an era of high energy prices.

Official Responses and Stakeholder Perspectives

The success of this collaboration is attributed to the alignment of goals between the developer and the financier. Jonathan Ball, Managing Director at Oakwood Group, emphasized the persistence required to bring the site to fruition. "This scheme has taken considerable time and effort to bring forward, and we are delighted to have reached this stage," Ball stated. "Broughton continues to be one of the most desirable locations in the Lancashire area, offering a combination of excellent connectivity, high-performing schools and a strong community environment."

From the financier’s perspective, the decision to back the project was rooted in the proven performance of the developer. Nigel Jackson, Senior Relationship Director at Paragon Development Finance, who led the facility alongside senior portfolio manager Shannon Altimas, noted: "We have seen first-hand the quality of homes Oakwood delivers and their ability to create developments that respond to local housing demand."

This mutual trust serves as a cornerstone for the project, providing stability in a sector that is otherwise defined by uncertainty.

Broader Implications for the North West

The Broughton project is symptomatic of a wider trend in the North West of England, where developers are aggressively targeting locations that balance lifestyle benefits with logistical connectivity. The shift toward "sustainable living" is no longer a luxury differentiator but a baseline expectation for modern housebuyers.

Impact on Local Housing Targets

By including 20 affordable units, the Oakwood Group is fulfilling a critical role in the local planning ecosystem. Affordable housing remains one of the most contentious areas of development, yet projects that successfully integrate these units alongside high-specification private homes are often more readily welcomed by local authorities and community stakeholders.

Market Resilience

The ability of the Oakwood Group to secure substantial funding in the current market environment serves as a positive indicator for regional development. While national headlines often focus on the "viability crisis" facing the industry, this project demonstrates that well-conceived, energy-efficient schemes continue to attract high-level institutional investment.

The Evolution of Residential Construction

As the industry moves toward 2030, the pressure to meet decarbonization targets will only intensify. The Paragon "Green Homes Initiative" acts as a financial lever to force this evolution. By incentivizing developers to aim for EPC A ratings, financial institutions are effectively accelerating the decarbonization of the UK’s housing stock. The Broughton development stands as a practical application of these green finance principles, bridging the gap between profit-driven development and the urgent societal need for sustainable, climate-resilient homes.

Conclusion

The partnership between Paragon Development Finance and the Oakwood Group at Broughton represents a strategic alignment of finance, construction expertise, and market demand. As the project progresses, it will likely serve as a benchmark for how regional developers can navigate the complexities of modern planning, environmental regulations, and financial constraints.

In an era where the UK housing market is constantly recalibrating, the Broughton scheme offers a glimpse into a potential future: one where connectivity, energy efficiency, and social responsibility are woven into the very fabric of new residential communities. For the residents who will eventually call Garstang Road home, the project promises a blend of high-spec living and long-term sustainability, while for the North West, it marks a significant step forward in meeting the region’s ambitious housing targets.