#WeAreHomesEngland

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Unlocking Potential Through Infrastructure Funding Kate Taylor Infrastructure, PRS and Complex Projects

#WeAreHomesEngland Who are Homes England? ● We are the Government’s Housing, Land &

Regeneration Agency for England.

● We are tasked with working quickly and at scale to boost overall housing supply and economic growth.

● The Agency participates in the market in two primary ways

o Land – bringing public land to market to drive housing growth

o Investment - increasing private sector housing numbers through equity, loans and other market interventions

● Work across directorates to maximise our impact.

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#WeAreHomesEngland Why Do We Invest? ● Market failure - Developers struggling to access finance from traditional

lenders. ● Market making – new or immature areas of the housing market where

government intervention can stimulate activity and promote private sector investment.

● We have several investment tools to unlock potential:

Short term development finance Long-term Infrastructure finance Grant funding for infrastructure

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#WeAreHomesEngland

£2 bn £1 bn HBF

Aims – Accelerate and Deliver More Units Infrastructure and Complex Projects SMEs

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• £2 billion focused on delivering infrastructure to support strong future pipeline of housing supply – target 160,000 homes.

• £1 billion for development finance to SME’s, custom builders and innovative construction methods – target 25,500 homes.

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Home Building Fund – Key Metrics Term Development Finance (Short Term)– typically 3 year

term, potential for longer if required. Infrastructure (Long Term) usually 8 – 10 year term, longer is possible for large/ complex schemes.

Loan Size £250,000 (minimum of 5 homes) - £200 million

Loan to Cost Typically up to 80% is achievable dependant on scheme requirements but we can stretch to 90% in exceptional circumstances. Recycled income and limited equity models supportable.

Margin 220 bps – 1,000 bps

Fees 0.5% - 1.0%

Profit Share? Depends on structure and Borrower Equity being utilised

#WeAreHomesEngland Contracted Schemes

Units 8,161

Loans £277m

Units 13,324

Loans £210m

Units 18,435

Loans £179m

Units 28,871

Loans £246m

Units 27,100

Loans £1,082m

Units 21,748

Loans £337m

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The Housing Infrastructure Fund ● A £5 billion government capital grant programme to unlock new

homes in areas with the greatest housing demand. Funding is awarded to local authorities on a highly competitive basis.

● The fund is divided into 2 streams: o Marginal Viability Fund – available to all single and lower tier

local authorities in England – Bids up to £10 million. o Forward Fund – available to upper tier Authorities in England –

Bids up to £250 million. ● Bids received to the value of £14bn across both programmes

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Purpose of the Housing Infrastructure Fund

• Deliver new physical infrastructure to support new and existing communities;

• Create confidence at an early stage in a scheme that will attract other

private and public sector money, and bring new land forward for development.

• Support ambitious local authorities who want to step up their plans for

growth and make a meaningful difference to overall housing supply; and • Enable local authorities to recycle the funding for other infrastructure

projects, achieving more and delivering new homes in the future

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Marginal Viability ● Designed to get housebuilding started quickly on sites where the upfront

costs of putting in the infrastructure are not stacking up financially.

● Working with 133 council-led projects ● Investment will fund key local infrastructure projects including roads,

cycle paths, flood defences and land remediation work, all essential ahead of building the homes.

● £866 million to unlock 200,000 homes ● This bids are now progressing through a period of funding clarification

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Forward Funding • Forward Funding is designed for larger, strategic and high-impact schemes,

• The funding will be used to forward-fund infrastructure schemes and, in some cases, could represent a significant proportion of the upfront development costs.

• Working with 44 areas across England to develop projects with the remaining £4.1 billion of the £5 billion Housing Infrastructure Fund,

• Potential to deliver over 400,000 homes in areas where housing need is greatest.

• Remains a competitive process with a period of ‘co-development’ before full business cases are submitted

• A really diverse range of infrastructure asks to unlock homes and support place making

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Private Rented Sector

• Both infrastructure funding and PRS development are delivery accelerants – when brought together there is potential for even greater impact

• Place Making can be significantly enhanced

• Early investment on site wide infrastructure reduces risk from viewpoint of other fun

• Accelerated Place Making particularly with regard to community infrastructure incr developments to individual renters or purchasers

• Fits with Government’s revised “multi tenure” approach.

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Case Studies

#WeAreHomesEngland

Wood Wharf ● 20 acre brownfield site located adjacent

to Canary Wharf

● £200m infrastructure loan provided to Canary Wharf Group

● Loan will facilitate delivery of mixed use development 3,610 homes; 2.8m sq ft commercial space and approx 17,000 jobs

● Works commenced April 2015

● Significant PRS element contained within phase 1

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#WeAreHomesEngland

Chilmington Green, Ashford • Scheme being delivered by Hodson

Developments -5,750 unit urban extension on a 376ha site on the outskirts of Ashford.

• HCA debt supported the completion of land assembly and the delivery of a programme of infrastructure including two access points off the A28, a spine road through the site and phase 1 s106 costs.

• Repayment of the loan will be from sale of land to third party developers and sales revenues on homes built directly by Hodson Developments.

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#WeAreHomesEngland

Greenwich Peninsula ● Major brownfield development.

Infrastructure funding accelerated the delivery of 7,500 new homes plus commercial and recreational space.

● Loan funded shared basement boxes and provided development platforms to enable developer to secure traditional development debt

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#WeAreHomesEngland

• 5,700 BTR units • £65 million infrastructure loan • Primarily funding combined

heat and power plant and multi storey car parking

Wembley

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#WeAreHomesEngland

East Village London • Developer: Qatari Diar / Delancey

• 951 apartments on two plots

• Part of Olympic Village masterplan

• HCA invested £181m through the Build To Rent Fund

• To be held long-term and managed through Get Living London vehicle

• Completion 2020

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