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Bankers circle-cash-starved housing associations

22/02/2012 11:25

http://www.thesundaytimes.co.uk/sto/business/Companies/article874115.ece

We read with interest the above article which was published in The Sunday Times, 19.02.2012 about the pressures on housing associations/registered providers (“HARP’s”) to fund future development programmes.   As banks increasingly become lenders of short-term finance this move has left a gap in the market for providers of long-term funding… enter the institutional investors.   There are substantial financial resources that are seeking a suitable investment into the market and we have to ensure that we create the right grade of investment to attract the funds.

We have been in dialogue with a number of HARP’s and we find that the Development Directors/Finance Directors are receptive to these new funding sources using institutional finance, in particular, long term finance (40yrs-50yrs) as a resource to refinance part their existing stock and release some of the proceeds in order to ignite their development program.   Deals have been done and we are working with one client who is accessing funding to work on two expansion fronts; (1) refinancing their completed new build stock to unlock capital, in order to invest into further new-build homes and (2) to acquire more new build homes from a national house builder and financed through fund.   The acquisitions are part of a strategic expansion to grow their homes under management.   This is just one example of how institutional finance can assist the delivery of new homes and meet a proportion of the 150,000 new homes target by 2015.

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