WORK will start this month on a 607-home development in York which has just marked another key landmark.

Octopus Real Estate has agreed to provide Heworth Green Developments, under the North Star banner, with an £18.3 million loan secured against the major development site.

The 8.95-acre former National Grid site, off Heworth Green, has planning consent for 607 homes, and retail or community-use space.

The £18.3 million loan is the latest funding milestone in the project, whose gross development value is estimated to be worth £85 million. A large part of the site will be for Build to Rent homes. North Star is developing the remaining 215 homes for the open market.

The loan will be used to refinance current debt, acquire the remaining part of the site, and finance the ground works and removal of a decommissioned gas holder. Work later this month will include remediation and infrastructure works, ahead of the new homes construction.

The site is part of a major brownfield development.

Ludo Mackenzie, head of commercial property at Octopus Real Estate, said: “The Heworth site is one of the largest residential development opportunity in York. It has taken many years to get to a position where works can commence, and we are proud to be involved.”

A spokesperson for North Star said: “Securing this funding deal is another major milestone in the project.

“The journey to transform this large, brownfield site into a vibrant new community has taken over 18 months so far and we are very excited to see it now coming to fruition.

“This will now enable us to start construction works on the site, and the first step will be to remediate the site which will start very shortly. Our aim is to create a high-quality sustainable development that York can be proud of and we are committed to delivering the development, even in these challenging times.”

Tom Frank, managing director, Ice Cubed Commercial Finance acted as the adviser.

He said: “Arranging the finance on this development has been complex, especially in the current challenging conditions. Successful closing of the deal is testament to our close relationship with Octopus Real Estate and the client. We are very proud to play our part in delivering this fantastic high-quality development so close to our York office.”

Octopus Real Estate is part of Octopus Group and a leading UK specialist real estate lender and investor.