Tuesday, 02 September 2014

Funding in place for troubled London regen project

Metropolitan Housing Partnership has finalised a £117 million deal with a two-bank syndicate that will help kick-start one of London’s largest regeneration projects.

The new funding offer will also ease regulatory concerns sparked by the troubled £416 million Clapham Park scheme.

Lloyds Bank and Barclays will provide the loan to Metropolitan subsidiary Clapham Park Homes after the group revised its business plan and agreed to inject £61 million into the project.

As Inside Housing revealed last July, the social housing regulator has been monitoring 36,000-home Metropolitan due to concerns around the financial risks being taken on at Clapham Park, as its viability relies heavily on market sale homes.

A regulatory judgement published by the Homes and Communities Agency in December warned that the group’s cash flows could be constrained if it did not achieve the £232 million of sales it expects over the next five years.

The revised plans scaled back the number of proposed new build homes, with more existing properties now being redeveloped.

Brian Johnson, chief executive of Metropolitan, said: ‘We are extremely pleased that we have secured this funding. Now we have an agreement in place we can press ahead with the real work of developing good quality homes for Clapham Park residents.’

The scheme will include 1,160 refurbished homes, 768 new social rent homes and 326 shared ownership or shared equity properties. The project is due to be completed in 2025.

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