London specialist targets more homes after raising £120m

Figures published in February revealed that London’s councils are spending £90m a month on temporary accommodation for homeless households. Rough sleeping in the capital has also hit a 10-year high, according to City Hall figures released in January.

Josie Parsons, Local Space’s chief executive, said: “The funding enables us to support those in need, with a focus on families with children, by providing stability via settled accommodation and alleviating the social impact that homelessness causes generations of a family.”

The not-for-profit group is aiming to deliver 473 new rented homes over the next five years, according to the Regulator of Social Housing.

Local Space said the funding will be used to shift existing debt to a “longer-term fixed-rate borrowing”. The interest rate on the new funding was not disclosed.

The landlord made an initial drawdown of £40m from the new private placement at the end of last month, which has a 15-year term length.

Another £40m, with a 22-year maturity, will be accessed next February. The remainder will be accessed in February 2026 and have a 25-year term length, the group said.

Local Space previously raised £61m through a private placement with MetLife Investment Management in 2021. The funding was secured against a portfolio of housing in east London.

The organisation was established to regenerate private sector homes to house people on homeless waiting lists. 

It is seen as creditworthy, as it has a financial agreement to guarantee its income from Newham, Hackney and Waltham Forest councils. 

In its last reported full year to the end of March 2023, Local Space posted a 21% drop in post-tax surplus, to £6.5m, on turnover of £39.6m.

In January, the regulator upgraded the landlord to a V1 grade for financial viability. It was previously among 19 landlords downgraded for viability in late 2022 due to the economic conditions.