OakNorth Loans Head South As Pandemic Crunches £100M
A second bet on luxury London property has turned sour for challenger bank OakNorth as it could be sitting on property loan defaults worth £100M.
The Park Place development, close to West Hampstead station, was funded with a £19M OakNorth loan in 2017. The bank has now appointed administrators.
The Kilburn High Road development went into administration with debts of £26M, of which £25.5M was to OakNorth, after an examination of the paperwork of the businesses tied to the property owned by developer Paul Godfrey, the Ham & High reports.
Last September, SoftBank-backed OakNorth was stung when administrators were appointed to the site earmarked for the 15-storey Parkview Battersea, a scheme with a reported £452M development value.
The company behind the scheme of 31 luxury and eight affordable apartments, with views of Battersea Park, was placed in administration, with Companies House data showing £7.7M owed to OakNorth.
Research shows that OakNorth has racked up nearly £100M in loan defaults largely thanks to lending to property developers, with just 10 borrowers responsible, the Financial Times reported.
OakNorth said that it had fully recovered debts on four of the 10 loans, and anticipated recovering more than 90% of the other six. The bank’s loan book is £3.5B.
