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Homes England reveals more details on housing bank, including CME route
Homes England’s chief investment officer has confirmed the National Housing Bank will always offer the continuous market engagement route, ahead of the launch in April.
Homes England reveals more details on housing bank, including CME route #UKhousingHomes England’s chief investment officer has confirmed the National Housing Bank will always offer the continuous market engagement route #UKhousingSpeaking on Monday at the Housing Investment and Delivery Symposium during Housing Week, London, Simon Century confirmed that Homes England plans to launch the new bank on 1 April and that an investment prospectus is to be published “in the coming months”.
The bank, which will be a publicly owned subsidiary of Homes England, was announced in June with £16bn in cash and a target to drive the delivery of 500,000 new homes.
“It’s £16bn of permanent capital that has come into the National Housing Bank. It will be launched – should be launched – on 1 April next year, subject to the final sign-offs,” Mr Century told attendees at the conference.
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He said the bank is a “10-year fund” that has a “long-term viewpoint” aimed at using different interventions to support developers to “go faster, or to go bigger”.
“But what it will always be is continuous market engagement, so as markets do change, we then go change our interventions as required,” he said.
Mr Century also said that the £16bn will split “roughly” into thirds between equity, debt and guarantees.
Unlike Homes England’s grant programmes, the National Housing Bank “will require a rate of return which basically pays government back”, he said.
“That’s sort of the golden rule, in many ways, that we have to live within, the same as the National Wealth Fund and these other [public financial institutions], but broadly around the gilt level,” he added.
Mr Century continued: “The real point of the National Housing Bank is for us to go and intervene into the market to either accelerate new home delivery or provide more additionality.
“It is not to be the market. If we are the market, this will fail in our objective here.
“The objective is to go, I think, mobilise that institutional capital coming in at scale, faster, bigger and more quickly.”
He said Homes England aims to support housing associations that “want to recapitalise a bit more”, recognising some of the “nervousness” around this.
“But what’s the alternative? You want to get bigger and you need some more capital flowing into the system,” he added.
In August, a number of sector professionals told Inside Housing that the bank needs to help alleviate some of the funding squeeze the sector is currently facing, highlighting the lack of access to “cheap funding”.
Homes England hopes the National Housing Bank can leverage in £53bn of additional private investment, creating jobs as well as new homes.
It will target a range of sites, including larger ones that struggle to get upfront lending due to risk and complexity.
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