In June 2015 Housing Growth Partnership was launched as an equity based business backed by Lloyds Banking Group and Homes and Communities Agency to provide development finance to regional builders for residential development projects. Housing Growth Partnership has committed to invest £100million nationally to achieve a 2000 new homes target.
There is an increased demand for residential housing and plenty of small to medium size businesses that have the skills to meets demand but limited finance to deliver this. Investment of this nature can provide the catalyst to support and enable regional housebuilders to expand their business and meet those demands.
Housing Growth Partnership will contribute capital and the builder will contribute capital and/or land External debt finance is raised to help fund the project. The builder will deliver the turnkey construction project and receive a management fee to cover the costs to develop the site. Profits will be subject to a pre-agreed profit share weighted towards the builder. The projects are to be delivered using a newly created SPV.
The criteria for applying for this finance are:
- Small and medium sized house builders who have evidence of a solid track record in delivering residential development schemes
- The housebuilders must be developing up to 100 residential units a year and have a proven track record in land buying, design, construction, marketing and sales of new homes
Types of opportunities Housing Growth Partnership will consider are:
- Equity Investment of up to £5million
- Support for residential developments schemes with a gross development value of £12million
- Schemes of up to 75 residential units
- Ideally schemes with outline planning/ability to start on site within 12 months
- Construction period of up to 36 months
Reasons for partnering with Housing Growth Partnership
- Investment of up to 75% of the total equity requirement
- Ability to invest in up to 3 projects with the same house builder at any one time
- Bespoke profit share arrangements weighted beyond the builder’s capital contribution
- Share of the financial risk
- Support from experienced residential development and equity investment advisors
- Short approval process with Investment Directors sitting on the Investment Committee
- Access to Lloyds Banking Group and end customer mortgage product offers