One Housing has borrowed £85 million in a long term financing deal with M&G Investments, an international investment manager. This deal is innovative for the housing sector, because a high proportion of the collateral comprised shared ownership properties.
One Housing has borrowed £85 million in a long term financing deal with M&G Investments, an international investment manager.
The 35-year loan will enable us to increase liquidity and develop 1,050 homes for social and affordable rent, shared ownership schemes as well as an additional 400 properties for market sale by 2020 to generate profits to invest in further affordable homes. This forms part of a wider ambition to develop 4,000 homes across all tenures over the next five years.
This deal is innovative for the housing sector, because a high proportion of the collateral comprised shared ownership properties.
Paul Rickard, Group Director for Finance, One Housing, said: “This innovative loan, using the growing value of our shared ownership portfolio, will help us to build thousands more high-quality homes to meet the critical demand in London and the South East.”
Mark Davie, Head of Social Housing, M&G, said: “One Housing already provides much needed homes in an area of the country where affordable housing is in short supply. This is our second transaction with One Housing and will enable further developments over the next few years.
“This approach brings benefits to our pension fund clients who will receive sustainable long-term returns, secured against residential property. M&G has now invested over £6 billion in UK social housing through property transactions, public bonds and private placements and we’re keen to do more.”
Until 2007, housing associations generally relied on banks and The Housing Finance Corporation to meet their external funding requirements. In recent years non-bank lenders such as M&G have been providing an increasing amount of longer term finance as banks withdraw from this market.
Published on 6 February 2017