Building alliances to build homes
THIS MONTH’S WISE OWL
Harry Swales, Interim Chief Investment Officer — Homes England
Harry Swales has worked with Homes England since 2015 and was appointed Executive Director of their Markets, Partners and Places directorate in February last year.
He has over 15 years’ experience in the real estate industry as a developer, investor and funder. A chartered surveyor by trade, Harry has a background in delivering projects in both the public and private sector.
Building alliances to build homes
Since Homes England launched, we have supported SME house builders in partnership with lenders who share our purpose. This strategy works because it uses the financial and operational capabilities of the market and provides additional support to SMEs, whilst delivering good value for public money.
We have recently observed a relatively resilient development lending market across both regulated banks and the alternative lending sector. However, the economic outlook means the volume and terms of finance available to SMEs can be variable.
Therefore, a wide range of quality lenders and capital is essential to drive the diverse, competitive, and resilient development lending market necessary for SMEs to build, grow and play a bigger part in building the high quality homes the country needs.
Since the launch of our Home Building Fund, Homes England has lent over £1.1bn in development loan finance, supporting close to 350 SME housing projects. Our direct lending activity is designed specifically to support builders who face challenges obtaining private sector finance.
Our lending alliances, with organisations like United Trust Bank, complement this approach, increasing the support available to builders by diversifying the lending market itself. By using our funding flexibly, we’re able to provide more choices for SME developers and support a more resilient lending ecosystem.
Our existing alliances support a full range of SMEs, funding projects as small as two homes and larger developments of up to 600 homes.
•The Housing Growth Partnership with Lloyds Bank is a fund which invests equity alongside SMEs into their development projects, also providing an SME advisory service through experienced industry experts.
•The Housing Delivery Fund with Barclays Bank provides loans of between £5m and £100m to larger SME development projects.
•In late 2020 we launched a partnership alongside non-bank lending platform, Invest & Fund, targeting the growth of micro and small builders with loans of between £400k & £2.5m.
•Our newest product, announced in February 2021 is The Housing Accelerator Fund, in partnership with United Trust Bank. This 5-year alliance provides SME loans of between £1m and £10m at enhanced leverage of up to 70% loan to Gross Development Value, easing the SME equity burden and allowing quicker building and growth.
Looking to the future, we’ll continue to work across the market to support SMEs in innovative and impactful ways. In particular, we’ll look to increase the finance available to SMEs showcasing sustainable, progressive building practices and will explore how we can expand the supply of institutional capital to support residential development finance.
At Homes England, we’re committed to supporting the growth and diversification of the SME sector, we know how important SMEs are to a healthy and resilient housing market. Our development finance and lending alliances help builders get on and build now and improve the lending landscape for SMEs. We’ll continue to explore new partnerships and opportunities to make this happen.