All homes in the £1 billion Welsh scheme to be let at intermediate rents
RCT appoints Bellerophon to develop 11,000 homes
Plans to build 11,000 new affordable homes in Wales have taken a giant leap forward after the landlord responsible for the £1 billion scheme appointed its development partner.
Developer Bellerophon Projects won the contract to build the homes for Pontypridd-based RCT Homes after it secured funding from a ‘major’ pension fund. The developer would not name the pension fund at this stage.
RCT Homes first announced its plans for a pan-Wales development company Devco Wales Number 1 in April (Inside Housing, 5 April). The 10,000-home organisation hopes to recruit landlords from across Wales to the for-profit subsidiary in exchange for development land. The landlords will receive an equity stake in the company.
The news will provide a boost to the Welsh Government, which has pledged to build 7,500 affordable homes by 2016 in a bid to cut the country’s 91,000-strong housing waiting list. RCT Homes’ plan will meet a large proportion of the government’s requirements if it is successful.
Bellerophon will enter into joint ventures with local authorities and housing associations to build the homes over the next seven years, carrying out the construction itself.
Three quarters of rental income from the homes will service the investment, with the rest going to the local authority or housing association for management costs. The homes will be built to level 4 of the code for sustainable homes.
All the properties will be let at intermediate rents based on local housing allowance rates so the schemes will generate enough income to give the pension fund an attractive return of around 4 per cent but still fall below benefit caps.
Chris Barnett, development director at Bellerophon, said: ‘We look forward to concluding the formalities over the coming few weeks and then moving swiftly to the matter at hand - delivering quality housing in sufficient numbers to start to impact on the current Welsh housing shortage.’
Malcolm Wilson, commercial director at RCT Homes in Aberdare, said the first four homes would be delivered ahead of finalising the contract with Bellerophon to fast-track the scheme.
Cardiff-based Bellerophon Projects was set up in February 2011. It is currently working on a 17-acre leisure and retail development in Cardiff Bay for Cardiff Council, plus a 1,000-home scheme in the centre of Cardiff, to include around 250 affordable homes.