A two-house project in the car park of Jack Straw's Castle is set to go ahead after the developer secured a £2.59 million loan.

Property finance company Capitalrise has provided the loan for the construction of two three-storey luxury townhouses next to the former pub, a grade II listed building and landmark in the Hampstead Conservation Area and next to the Heath.

The development is being led by Albany Homes developer Barry Angel and architect Quinlan Terry.

Ham & High: The architect's drawings for two new homes in the car park of Jack Straw's Castle in HampsteadThe architect's drawings for two new homes in the car park of Jack Straw's Castle in Hampstead (Image: Quinlan Terry Architects)

Mr Terry worked with Raymond Erith, the man who designed and restored Jack Straw’s Castle in the 1960s.

A planning inspector gave the go ahead to the plans in May 2021 after Heath and Hampstead Society, Camden Council, and the City of London Corporation fought the plans.

Camden Council officers previously rejected the application on the grounds that it would harm the setting of Jack Straw's Castle, it does not contribute to affordable housing provision, and that it would impact on parking availability.

David Castle, of the Heath & Hampstead Society, said: "It's a very great shame for these two buildings to be built on the edge of the heath and attached to a remarkable Grade II listed building. Nobody wants it apart from the developers."

Mr Terry previously defended his scheme saying it reflects the design of Jack Straw's Castle, along with Georgian buildings in Hampstead.

Both properties are expected to be completed within 22 months and sold on completion.

Katy Katani, director at CapitalRise, said: “We are exceptionally proud to be working with the developer to finance these luxury properties located on the grounds of Jack Straw’s Castle, such a prominent landmark in Hampstead Heath.

“We worked very closely with the developer to construct a tailored finance package and we look forward to watching the development progress."

Uma Rajah, chief executive of Capitalrise, added: “We are very excited to be involved in this project because it is so rare to have the opportunity to fund a new build development in Hampstead, which is such an iconic part of London.

"As specialist prime real estate lenders, working with very experienced property developers in these highly desirable locations is exactly the type of project we love to fund.”