MIPIM 2020: Discover how Homes England’s funding is diversifying the market
Homes England’s strategic plan sets out our ambition to unlock land and investment to drive housing supply. To facilitate this, the loans team at Homes England works to support parts of the residential sector that would not otherwise secure funding. This may be because they are new enterprises, SMEs or an MMC manufacturer like Ilke Homes, to whom we provided a £30m to enable their expansion.
A core principle of our work is that we do not compete with the market. Instead, we intervene where the commercial market is failing to deliver what is needed to increase housing supply.
By way of demonstrating the need for additional support for this part of the sector, in the last financial year we lent £362m in development finance and £284m in infrastructure finance, and we want to do more.
There are three main aspects to our work. Increasing supply by supporting schemes that would otherwise not get built because commercial lenders will not lend. Enabling the acceleration of building projects so that we deliver homes quicker through providing financial structures that maximise the impact of our borrower’s equity pot, and unlocking schemes where the infrastructure requirements are prohibitive for the developer to fund.
Our infrastructure lending provides debt to help with the cost of infrastructure required to deliver projects, whether that be wires and pipes in the ground, a bridge or road, or other works that are needed to enable the development of homes to begin.
These elements of a project are rarely attributed any value by commercial lenders, but the costs are pulled into the project cashflow, and this creates a challenge in terms of the structures that those lenders will require, for example the size of the equity needed.
Improving innovation in the residential sector is a huge part of our mission. A lack of competition in the housing market stifles the entrepreneurial ambition we need to increase the pace and quality of what we build.
Across all our lending functions we are keen to do more and constantly look to work with developers and the wider lending market to support more projects.
Mipim 2020 offers us the opportunity to engage with lenders and developers to further understand where there are gaps in what these players need to lend and build so we can intervene and better tailor our support. I’m looking forward to seeing you all in Cannes.
Gabrielle Berring is Director of Loans at Homes England. Before joining Homes England she was Director of Commercial Real Estate at Metro Bank, she has held a number of senior roles in the real estate finance sector and is a Board Member of Accord Housing Association.
