Tuesday, October 4, 2022

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.”

A message from the Editor:

Thank you for reading this story on our news site - please take a moment to read this important message:

As you know, our aim is to bring you, the reader, an editorially led news site and magazine but journalism costs money and we rely on advertising, print and digital revenues to help to support them.

With the Covid-19 pandemichaving a major impact on our industry as a whole, the advertising revenues we normally receive, which helps us cover the cost of our journalists and this website, have been drastically affected.

As such we need your help. If you can support our news sites/magazines with either a small donation of even £1, or a subscription to our magazine, which costs just £31.50 per year, (inc p&P and mailed direct to your door) your generosity will help us weather the storm and continue in our quest to deliver quality journalism.

As a subscriber, you will have unlimited access to our web site and magazine. You'll also be offered VIP invitations to our events, preferential rates to all our awards and get access to exclusive newsletters and content.

Just click here to subscribe and in the meantime may I wish you the very best.




Latest news

Related news

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close