Legal & General (L&G) has agreed a GBP50 million, 40 year debt facility to Housing Solutions, helping to support the Maidenhead-based housing association’s growth plans as it looks to deliver approximately 1,600 new homes over the next six years.
Secured against Housing Solutions’ portfolio of existing social housing assets, the loan will be used to finance the group’s ongoing development activities.
Drawn down in four instalments, scheduled between December 2014 and October 2015, the loan is structured to provide greater alignment to the development pipeline process than traditional arrangements.
Established in 1995, Housing Solutions is a provider of affordable homes in the South East, currently responsible for owning, managing and maintaining more than 8,000 homes. Operating across a total of seven local authorities in and around the Maidenhead area, where affordability remains challenging for low to medium level workers, its geographical remit is characterised by high capital values and long waiting lists for housing.
Forming part of its wider UK housing and infrastructure strategy, this latest transaction marks L&G’s fourth major investment in social housing. Committing over GBP5.5 billion in UK infrastructure projects to date, including residential regeneration, key worker accommodation, care homes and student accommodation, it has provided a total of GBP455 million to affordable housing over the past 18 months.
Alex Gipson, lending manager at Legal & General, says: “Since its creation in 1995, Housing Solutions has demonstrated a real commitment to delivering quality affordable housing in Maidenhead and its surrounding areas. With strong operational cashflows, tight cost controls and a geographic focus, we believe its performance reflects a clear and enduring business model that supports ongoing growth and development.”
Andrew Robertson, finance and resources director of Housing Solutions, says: “This funding has secured our medium term financial requirements by providing long-term funding to support our plans to deliver much needed affordable housing in the South East of England. The deferred structure allows us to deliver future developments with the assurance that funding is available and reduces the need to rely on substantial cash balances, reducing carry costs.”
Other recent social housing deals concluded by L&G have included a GBP102 million, 15 year debt facility to The Hyde Group and a GBP40 million, 25 year debt facility to Thames Valley Housing Association. It also recently secured a portfolio of over 4,000 housing units, let to Places for People on a new 50 year lease, for GBP252 million, supporting its plans to expand its housing stock by building 7,000 new housing units over the next seven years.