MERA Investment Management has launched its first equity joint venture with Nicholas King Homes to fund 110 new family homes in Cranleigh, Surrey, in a scheme with a gross development value of £ 55 million.
Under the structure, MERA will provide preferred equity alongside Nicholas King Homes, while Paragon Development Finance is supplying senior debt. Construction began in April, and roughly half of the homes have already been sold to an affordable housing provider.
The partnership is being positioned as a move toward more flexible and innovative funding models in UK housing delivery. Nicholas King Homes says the deal helps unlock capital and accelerate delivery, while MERA says the collaboration reflects confidence in high-quality schemes with strong local demand.
The announcement also highlights wider market conditions. With banks continuing to pull back from development lending, MERA points to Bank of England data showing that lending to private-sector developers has fallen to just under £13.6bn, around 25% below a pre-COVID-19 peak of £15.4bn. Against current construction levels, the company argues this leaves a funding gap of about £1bn, increasing reliance on private capital.
MERA says rising private credit investment shows investors are increasingly seeking returns from real estate debt and equity, with tangible assets viewed as more attractive amid stock market volatility. Edward Matthews, MERA’s CEO, argues that private capital has effectively stepped in to fill the shortfall and expects the trend to continue.
MERA describes itself as a London-based private real estate lender and investor focused on senior loans and preferred equity, backed by a family office established in 1933. Nicholas King Homes is a long-established UK developer and constructor, having delivered more than 100 schemes and completed over 3,000 plots since 1991.
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