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£1bn government-backed fund yet to make first investment after two years
A £1bn government-backed housing fund aimed at councils has made no investments in the two years since its launch, Inside Housing can reveal.
The New Communities Partnership was launched in 2016 with the support of the government’s housing delivery agency, the Homes and Communities Agency (now Homes England).
But two sources close to the partnership have told Inside Housing that it is still yet to make an investment.
The fund is managed by Kier Living (the contractor’s affordable housing, care and student accommodation arm), investment management firm Cheyne Capital, and the Housing Growth Partnership, a joint venture between Homes England and Lloyds Banking Group.
When it was launched, the partnership said it had “ambitions to help the public sector to build 10,000 new homes across the UK”.
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At the time, it also said that it hoped to break ground on its first schemes before the end of the year.
The partnership offers finance to housing providers, especially councils, to develop schemes without government grant. Under the proposals, the homes would then be owned by Cheyne Social Property Impact Fund and leased to the council for a period of usually 20 years.
Local authorities striking deals with the partnerships would then be obliged to pay index-linked returns.
The social housing sector has traditionally been cautious about leaseback funding, which could explain why the fund has yet to be used by providers.
As well as two sources confirming that no deals have been done since the fund was launched in May, the New Communities Partnership’s website has been taken offline.
The model of the partnership is similar to that of The Legacy Foundation, which was also set up in 2016 by former England football captain Rio Ferdinand and fellow footballers Bobby Zamora and Mark Noble.
That scheme immediately struck a deal with Central Bedfordshire Council, which planned to build 1,000 homes using the funding provided by insurance company Aviva on a 45-year index-linked agreement.
Work has not yet started on this development, which is over a year behind schedule.
The Legacy Foundation has also struck a £90m deal with Wirral Council to build apartment blocks in Birkenhead’s docklands.
Cheyne Capital and Homes England declined to comment on the story.
A Kier Living spokesperson said: “Developing delivery vehicles is obviously done against a changing regulatory and funding backdrop, so NCP [New Communities Partnership] hasn’t been taken up by public sector bodies in the volume originally envisaged, but Kier Living and Cheyne Capital continue to work closely together should an opportunity arise where the NCP model can add value, as the vehicle still provides opportunity for public bodies to build homes without being an immediate burden to the public purse.”
