SME homebuilders offered alternative route to finance through launch of new scheme

Stuart Pearcey
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SME homebuilders offered alternative route to finance through launch of new scheme
A new fund has been launched to help SME housebuilders to add more than 5,000 properties to the UK’s housing stock when traditional funding is not available. Homes England, alongside Greater Manchester Pension Fund, listed wealth manager Mattioli Woods and other private institutional investors, have committed £80m to the Initial Close of the Newstead SME Real Estate Lending Fund. The Fund is to be managed by specialist fund manager Newstead Capital and the intention is to grow the fund to £300m in subsequent capital raised and deliver £1bn of funding over the Fund’s lifetime. It is intended to help to meet Homes England’s mission to accelerate change in the housing market by bringing in new sources of institutional capital and more lending channels to the SME housebuilding sector, whilst enabling the construction of over 5,000 high-quality, affordably priced, and efficient new homes throughout England. Peter Denton, Chief Executive of Homes England, said: “This partnership is our latest intervention to offer SME housebuilders a route to finance that may otherwise be unavailable through traditional means. “Introducing new sources of institutional capital to support SME house builders is a priority for Homes England and our cornerstone investment in this fund signals government support for accessible and competitive finance to meet the needs of SME developers across the country.

“We look forward to working with our new partners and welcome further institutional capital to help grow this fund and give SME housebuilders the helping hand they need to get more quality homes built in our regions.

“By empowering smaller regional housebuilders, the Fund will help to encourage the creation of sympathetic and environmentally responsible projects while supporting the regional SME house building sector and boosting regional job creation. The Fund employs a robust underwriting process overseen by Newstead, incorporating its own credit, environmental, social and governance metrics and will encourage the development of sustainable housing by taking new homes’ energy efficiency into account at the underwriting stage. Simon Champ, CEO at Newstead Capital, said: “This is an exciting step for Newstead. Our fund is the first of its kind. We are providing a conduit for long term institutional investors to gain access to a market which until now has been out of reach. “The Newstead RELF is aimed exclusively at the unfulfilled need for capital from regional housebuilders. Regional housebuilding has historically been critical to the economy, providing the country with a diverse range of smaller housing communities. The fund gives pension, insurance, and wealth management institutions an appropriate long term investment platform to support this vital industry.

“By meeting this demand, we will provide an attractive return for investors, the taxpayer and Manchester retirees, while also empowering local SME builders to compete with larger housebuilders. The Newstead RELF fund will allow more new homes to be built, tackling the housing shortage and contributing to levelling up by allowing smaller sites to be developed, with the associated environmental benefits.”

New shipping route links Immingham and Lithuania

Stuart Pearcey
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New shipping route links Immingham and Lithuania

Associated British Ports and Unifeeder, owned by DP World, have launched a new service from Klaipeda in Lithuania to Immingham.

The service has been launched by Unifeeder to transport containerised cargo from the Baltic port. The new route is a weekly sailing offering faster transit times, with the vessel leaving Klaipeda on Friday and Immingham on Monday. The maiden voyage saw the Elbspring vessel arrive in the Humber on 15th September. Simon Bird, Regional Director for the Humber ports said: “We’re delighted Unifeeder has launched this new route. This is great for the market, again showing the proximity of Immingham to the European markets and the need for customers to bring their goods in through faster and more direct routes.” Martin Gaard Christiansen, European CEO for Unifeeder, said: “We’re delighted to bring the benefits of a faster transit time between Klaipeda and Immingham directly to our customers. In close cooperation with Immingham Container Terminal, Unifeeder offers a reliable, competitive, and environmentally friendly connection between the important markets of the Baltics and the UK.” This new route enables more cargo to be moved by sea to reduce the number of land miles laden and empty containers are required to travel, providing sustainability benefits across the value chain. Over the past five years container volumes have increased by over 40% as more and more businesses choose to benefit from improved access to UK, European and global markets, as well as the state-of-the-art facilities and value-added services ABP provides.

Firms invited to tender for enviro-crime enforcement work in Lincolnshire

Stuart Pearcey
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Firms invited to tender for enviro-crime enforcement work in Lincolnshire
A tendering process inviting businesses to carry out enforcement across council areas of South Holland, Boston, and East Lindsey has been launched for the first time. The work will cover litter, dog-fouling, fly-tipping and other enviro-crime offences which blight communities. It’s felt that opening up procurement to work across all three areas is a key milestone for the Partnership while also being able to address enviro-crime head on across each authority. The successful bidder will provide foot patrols and overt CCTV surveillance across the Partnership to tackle littering, dog fouling and fly tipping. Officers will also be able to enforce offences in areas under Public Space Protection Orders. CCTV surveillance has already proved successful in Boston at fly-tipping hotspots with incidents on a downward trend. Enviro-crime enforcement officers have also recently started in East Lindsey and now the scheme aims to share that best practice by introducing the measures across the Partnership. The launch of the procurement process is a significant milestone for the Communities Directorate as set out in the Annual Delivery Plan. Cllr Deborah Evans, Portfolio Holder for Environmental Services at Boston Borough Council said: “While I have been frustrated by the length of time it has taken to get the tender out, I can see the huge benefits of the South and East Lincolnshire Councils Partnership coming together to make our councils attractive to potential enforcement companies and better value for money for our residents. “Giving us a wider choice will deliver the best possible outcome and service for the people of Boston.” Cllr Martin Foster, Portfolio Holder for Operational Services at East Lindsey District Council said: “I am very happy that Partnership working has led to this opportunity to help deliver a wider-approach to tackling enviro-crime across each authority. “By working across the Partnership, the successful bidder will also help deliver our key education messages to all our residents no matter where they live over such things as fly-tipping and litter.” Cllr Anthony Casson, Portfolio Holder for Public Protection, at South Holland District Council said: “This is a fantastic opportunity for enforcement companies to operate across three councils and make a difference to enviro-crime issues which impact so many villages and towns. “I am sure residents will be supportive to bring this enforcement to South Holland and being able to deliver a cost-effective way to tackle the problem collectively for all our residents is a positive step forward.”

‘Not before time’, says BCC of Government’s plans for business energy prices

Stuart Pearcey
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‘Not before time’, says BCC of Government’s plans for business energy prices
Shevaun Haviland, Director General of the BCC, has called for swift action to pass on energy savings to business as quickly as possible, after months of pressure for Government action. She said: “For months we have been calling for Government intervention to help businesses with eye watering energy costs. This support package is significant and will ease the cost pressures that have been piling up on businesses. It will allow many firms that were facing closure, or having to lay off staff or reduce output, to keep going through the winter. “The exact level of support will vary greatly from business to business depending on the detail of its contract, so some will inevitably do better than others. “We now need action to get this saving passed onto business as soon as possible – every day will put some firms closer to the edge and they cannot hang on much longer. There must also be effective legal oversight to ensure no firms that are due this money miss out. “For those that will benefit, six months support is not enough for most firms to make plans for the future. “We understand there are a range of unknowns for the Government in looking ahead, but without that reassurance very few firms will make plans to invest or grow.  “Some businesses will still struggle to meet their bills despite this government intervention, the Chancellor must prioritise those firms in his mini-budget on Friday. “There are a range of other challenges that must be addressed including labour shortages, supply chain disruption, and rising raw material costs. “To truly revitalise our economy for the difficult months ahead then there must be a clear long-term plan that gives business the confidence to grow.” MEANWHILE, Gareth Stace, Director General of UK Steel, said: “The Business Secretary’s announcement today demonstrates that this new Government understands the sheer scale of the issue and the need to deliver a significant solution swiftly. Setting a price cap for electricity at £211/MWh for six months gives foundation sectors, such as steel, the chance to get through the winter by giving us a competitive business landscape. The Government has clearly listened to sectors such as steel, estimated the enormity of the challenge that energy intensive sectors face, and today has delivered. “It is essential that Government is now ‘fleet of foot’ if the situation develops further to ensure that British business is competitive within Europe and across the World. If we have parity on energy prices, then we can make steel competitively and provide well-paid and highly skilled jobs in areas of the UK where governments have more recently looked to level up. “The Government must now move to rapidly reform the energy market to ensure longer-term competitive price beyond the current price cap. The steel industry stands ready to work with Government to demonstrate the benefit that the announcement today will have on our foundation sector and to reform the energy market so that we are not in the same position this time next year.”

Manufacturers expect sharp fall in output in next three months

Tess Egginton
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Manufacturers expect sharp fall in output in next three months
UK manufacturers reported a slight fall in output in the three months to September, with a much sharper decline expected in the next three months, according to the latest CBI/Accenture monthly Industrial Trends Survey. This is the weakest expectation for output growth since the three months to January 2021. The survey found that total order books were seen as broadly normal in September, while stocks were more than adequate for the first time since April 2021. Manufacturers continue to expect a rapid increase in average selling prices in the coming quarter (+59% from +57% last month). The survey, based on the responses of 238 manufacturing firms, found:
  • Output in the three months to September fell at a broadly similar rate as in the three months to August (balance of -4% from -7%). Output is expected to fall at a faster pace in the next three months (-17%).
  • Output fell in 8 out of 17 sub-sectors, with the overall decline being largely driven by food, drink and tobacco. This was largely offset by strong growth for motor vehicles and transport equipment firms.
  • Order books in September were seen as broadly normal, after being below normal last month (-2% from -7%; average is -18%), while export order books remained below normal (-8% from -12%; average is -19%).
  • Stocks were seen as more than adequate and to the greatest extent since February 2021 (+6% from +2% last month).
Anna Leach, CBI deputy chief economist, said: “It is clear that the downturn, which originated in consumer-facing services, has spread to manufacturing, with output falling for the second month running. When adding an uncertain demand environment to ongoing input and labour shortages, and a cost-of-doing-business crisis, the outlook looks increasingly challenging for the sector. “If the country is going to fulfil the government’s ambitious plans to supercharge economic growth, businesses need the confidence and the capital to invest. The announcement of support on energy bills is a good first step, and the CBI looks forward to working in lockstep with the Government going forward.”

Beal buyers snap up £1.7m of luxury properties as housebuilder returns to roots

Michael Fisher
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Beal buyers snap up £1.7m of luxury properties as housebuilder returns to roots
Househunters have reserved luxury properties worth a total of £1.7m at the launch of Beal Homes’ Holderness Chase development. The development in Preston, East Yorkshire, will feature 64 luxury two, three and four-bedroom homes, with prices in the first release ranging from £200,000 to £350,000. Dozens of potential buyers attended the launch at one of the Holderness area’s favourite venues, The Stag’s Head Inn at Lelley, where the first 10 homes were released. Six homes were reserved by buyers over the weekend, with a further five applications made by existing Beal owners and new customers looking to benefit from Beal’s Smooth Move service. Smooth Move is Beal’s tailored and personal service for existing homeowners under which the housebuilder takes care of much of the process of buying and selling, so customers can be assured of a stress-free move to their new home. The development marks a return to the Holderness area east of Hull where it all began for family-owned Beal. The East Yorkshire-based business was founded almost 55 years ago and delivered its very first project, building two shops and a house, in nearby Hedon. Holderness Chase, off Sproatley Road, is Beal’s first development in the Holderness area for almost 20 years, so has attracted a great deal of interest from local buyers. Repeat Beal buyers Karl and Nicola Sainty, who currently live in nearby Hedon, reserved a four-bedroom Haxby. It will be the couple’s third Beal home together, having bought their first property from the housebuilder 17 years ago. Karl, 42, who works as a self-employed Health & Safety Manager, said: “We like the area and the fact it’s so close to Hedon, which has all the shops and restaurants we like. “We’ve got family in Preston and it’s a peaceful and picturesque place. We love the layout of the Haxby we’ve reserved, as it has two en-suites and is upgraded to include an orangery on the back of the house. “We have two grown-up children living with us and the downstairs layout gives us a lovely space for hosting people and entertaining. “We’ve always felt with Beal that they do so much more for their buyers than other housebuilders. They look after their customers, they don’t push you into a sale, and they’re a very professional company to deal with.” Holderness Chase offers househunters the appeal of village life in a semi-rural location, while also enjoying rapid access to Hull and beyond via the A63. It features Beal’s most popular house types and appeals to a wide range of househunters, from first-time buyers to families and downsizers. With Preston being just 15 minutes’ drive from the centre of Hull, Holderness Chase is also an attractive proposition for professionals looking for peace and tranquility, while staying within easy reach of the city. Anna Langrick, 37, and Grant Luckman, 30, who currently live in a Beal home in Kingswood, Hull, also attended the launch event. The couple are looking to upsize and move to a more rural location and were impressed by the three-bedroom Levisham. Anna said: “I’ve been looking to move somewhere a little quieter for a while. We’ve got family and friends around this area, so Holderness Chase caught my eye. “We live in a Beal home at the moment and my nephew has just moved into a Beal. We’re looking to upgrade and have a little bit more space and we loved how the Levisham would offer us a proper dining room space to host people in.”

Yorkshire Chamber calls for “immediate clarity” on Government’s Energy Bill Relief Scheme

Michael Fisher
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Yorkshire Chamber calls for “immediate clarity” on Government’s Energy Bill Relief Scheme

Responding to the Government’s Energy Bill Relief Scheme for business, Martin Hathaway, managing director of the Mid Yorkshire Chamber of Commerce, said: “I am delighted to see firm action from the Prime Minister and Chancellor to tackle the energy crisis. This is a much-needed step in the right direction. 

 

“Many firms were facing very tough times ahead with these spiralling costs, on top of existing challenges stemming from the pandemic, Brexit fall out, supply chain and recruitment issues, and the war in Ukraine.  

 

“This support is vital to see Yorkshire firms throughout the winter, but clarity is needed immediately. Levels of support will vary from business to business, so it is key that any business who is eligible for support has a clear plan of exactly what they are entitled to and that they are able to access it quickly and efficiently. 

 

“While this package is significant, I worry that six months of support is not enough to combat the previous years of economic unrest. Many firms will not have sufficient reserves in place to plan for longer term recovery and growth.  

 

“Understandably there are many unknowns facing our region’s firms and the Government alike, but short-term planning is only good for short term survival. Our organisations need longer term commitments to allow them to plan ahead, invest in our towns, cities and people, and truly provide a boost to the Yorkshire economy for generations to come.” 

 

Insolvency-related activities rise in Yorkshire and the Humber compared with much of the UK

Michael Fisher
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Insolvency-related activities rise in Yorkshire and the Humber compared with much of the UK
The number of businesses in Yorkshire and the Humber experiencing insolvency-related activity in August 2022 saw another increase since the previous month to 267 businesses, with levels having risen by 12.2% over the last five months. The research from insolvency and restructuring trade body R3, which is based on an analysis of data provided by CreditSafe, shows that Yorkshire and the Humber was one of six regions which saw a rise in insolvency-related activities in August, increasing by 11.3% since July. Only Scotland (up by 42.3% month on month), the South West (up by 21%), and the West Midlands (up by 18.3%) saw greater rises. In contrast, when compared with the previous month, Wales saw the greatest fall in this type of activity, which includes liquidator and administrator appointments and creditors’ meetings, dropping by 31.7%, following by the North East (down by 19.7%), the South East (down 16.1%) and the East Midlands (down 12.8%). In January, Yorkshire and the Humber recorded its lowest numbers affected by insolvency-related problems with just 150 businesses, while the highest were seen in March when 601 businesses in the region experienced insolvency-related problems. Eleanor Temple, chair of R3 in Yorkshire and a barrister at Kings Chambers in Leeds, comments: “Given growing concerns both here and globally about the impact of the turmoil in the energy markets and the high cost of living, the fact that the number of businesses seeing insolvency-related issues in Yorkshire and the Humber has already spiralled in recent months, is obviously concerning. The region showed some strong signs of recovery post-Covid in the second half of last year, but is struggling to remain resilient to the current onslaught of negative pressures.” According to R3’s analysis of the CreditSafe data, significant issues in the region continued to rise around late payment of invoices, one of the key indicators of business distress. In August, 51,835 companies in Yorkshire and the Humber owed money having been unable to meet their payments on time, this was slightly higher than in July (51,709 companies affected). In August, the region’s firms had a total of over 798,500 invoices on their books that had gone past their payment deadline without being settled, with an average invoice value of around £10,670. Eleanor Temple continues: “Unfortunately, late payment of invoices places additional financial stress on customers’ businesses, so passing problems down the supply chain and escalating the situation. It is worrying to see this persistent issue continuing to grow in the region, indicating that some businesses already have underlying difficulties. “Given the current economic uncertainty, it is vital that firms in the region batten down the hatches and prepare for some challenging months ahead. Those that are already starting to see signs of financial distress should waste no time in seeking professional advice; the earlier that insolvency practitioners are involved, the more tools they have at their disposal to help companies improve their situation.”

GNG sports division expansion leads to larger dedicated Wakefield manufacturing facilities

Michael Fisher
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GNG sports division expansion leads to larger dedicated Wakefield manufacturing facilities
Having seen sales increase by 50% year on year, GNG’s sports division has expanded its operations into the company’s entire 28,000sq ft manufacturing facility in Wakefield, doubling its floorspace. Previously occupying 14,000sq ft of floor space in a nearby building in Navigation Yard, the sports operation has now moved into GNG’s main premises following the mattress division’s relocation to its new factory in Normanton. The company has made a £200,000 investment into the Wakefield site to meet the requirements of the fast-growing sports division, and has recently also invested in new CNC machinery as well as continuing its focus on R&D. GNG Sport currently employs 40 people including a 20-strong team of sewing machinists. Established in 1995, GNG Sport manufactures white label branded sports equipment and has become the leading manufacturer of rugby training equipment suppling a large range of foam-based products from tackle bags and contact shields to post protectors and pitch kits. It is also becoming well-known within the fast-growing fitness industry, manufacturing plyo soft boxes, punch bags and exercise mats as well as many other products. Its blue-chip customers include Gilbert, Life Fitness, Decathlon and Manchester United. “Over the last 20 years, we’ve established ourselves as a leader within the rugby sector and we’re fast establishing a similar reputation within the flourishing fitness industry,” explains Neal Spencer, GNG sports managing director. “Since the Covid outbreak, we’ve seen a surge in orders, initially with more people needing gym equipment as they worked out at home and then following gym refurbishments and upgrades post-lockdown as well as benefitting from the many new sectors we’ve moved into. “This uplift has been accelerated by the disruption of the global supply chain with more customers here wanting to source good quality, British-made products. As a result, we were rapidly reaching capacity in our previous manufacturing space, so to be able to double our footprint at the Wakefield site is fantastic, giving us the opportunity to continue to grow – we expect to create another 10 jobs here during 2022.” GNG Sport has developed a number of new markets and now supplies a wide-ranging customer base including safety, soft play, gymnastics and football as well as offering a multitude of applications for sectors such as early learning, schools, public health, museums, warehousing and construction. “We are proud to have built such a successful business and to be continuing to invest in Wakefield. We remain committed to providing on-going staff development, giving our team the specialist training they need to work with a range of technical materials. There’s no doubt that it is our ability to produce everything in-house, from traditional screen printing to state-of-the-art digital printing, laser fabric cutting machines, along with converting our own foam, that gives GNG the edge over our competition.”

Government outlines plans to help cut energy bills for UK businesses

Tess Egginton
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Government outlines plans to help cut energy bills for UK businesses
New support for businesses facing rising energy bills has been unveiled by Business Secretary Jacob Rees-Mogg today (Wednesday 21 September), to support growth, prevent insolvencies and protect jobs. Through a new Government Energy Bill Relief Scheme, the Government says it will provide a discount on wholesale gas and electricity prices for all non-domestic customers (including all UK businesses, the voluntary sector like charities and the public sector such as schools and hospitals) whose current gas and electricity prices have been significantly inflated in light of global energy prices. This support will be equivalent to the Energy Price Guarantee put in place for households. It will apply to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts. It will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial six-month period for all non-domestic energy users. The savings will be first seen in October bills, which are typically received in November. As with the Energy Price Guarantee for households, customers do not need to take action or apply to the scheme to access the support. Support (in the form of a p/kWh discount) will automatically be applied to bills. To administer support, the Government has set a Supported Wholesale Price – expected to be £211 per MWh for electricity and £75 per MWh for gas, less than half the wholesale prices anticipated this winter – which is a discounted price per unit of gas and electricity. This is equivalent to the wholesale element of the Energy Price Guarantee for households. It includes the removal of green levies paid by non-domestic customers who receive support under the scheme. The level of price reduction for each business will vary depending on their contract type and circumstances:
  • Non-domestic customers on existing fixed price contracts will be eligible for support as long as the contract was agreed on or after 1 April 2022. Provided that the wholesale element of the price the customer is paying is above the Government Supported Price, their per unit energy costs will automatically be reduced by the relevant p/kWh for the duration of the Scheme. Customers entering new fixed price contracts after 1 October will receive support on the same basis.
  • Those on default, deemed or variable tariffs will receive a per-unit discount on energy costs, up to a maximum of the difference between the Supported Price and the average expected wholesale price over the period of the Scheme. The amount of this Maximum Discount is likely to be around £405/MWh for electricity and £115/MWh for gas, subject to wholesale market developments. Non-domestic customers on default or variable tariffs will therefore pay reduced bills, but these will still change over time and may still be subject to price increases. This is why the Government says it is working with suppliers to ensure all their customers in England, Scotland and Wales are given the opportunity to switch to a fixed contract/tariff for the duration of the scheme if they wish, underpinned by the Government’s Energy Bill Relief Scheme support.
  • For businesses on flexible purchase contracts, typically some of the largest energy-using businesses, the level of reduction offered will be calculated by suppliers according to the specifics of that company’s contract and will also be subject to the Maximum Discount.
If you are not connected to either the gas or electricity grid, equivalent support will also be provided for non-domestic consumers who use heating oil or alternative fuels instead of gas. Further detail on this will be announced shortly. Government will publish a review into the operation of the scheme in three months to inform decisions on future support after March 2023. The review will focus in particular on identifying the most vulnerable non-domestic customers and how the Government will continue assisting them with energy costs.
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