Successful places

with homes and jobs

A NATIONAL

AGENCY

WORKING

LOCALLY

Delivering Build to Let

Andy Rose

Chief Executive

Homes and Communities Agency

10 February 2015

The HCA – focused on delivery

The Homes and Communities

Agency is the national housing,

regeneration and social housing

regulation agency for England.

Our vision is for successful places

with homes, jobs and economic

growth

Core activities:

– Housing

– Land

– Investment

– Regulation

– Local Growth and Regeneration

Aligned public

funding and delivery of

local priorities

Land

Local Growth

Affordable housing

RecoverableInvestment

(debt/equity)

Regulation

Homes, Jobs, Growth, Communities

HCA-Investments (HCA-I)

Ensuring that we have the right skills in place to deliver Government

interventions – led to creation of HCA-I

Based on bringing commercial skills into the public sector (similar to

Infrastructure UK and Green Investment Bank)

Market interventions to lever in private finance and investment

Result – a dedicated unit with staff from the banking sector, the property,

surveying and planning professions alongside programme and project

managers - combining financial disciplines with social outcomes.

PRS – recent history

Montague Report 2012 - measures aimed at boosting professional

investment in good quality, privately rented homes and to help meet the

nation’s housing demand

Identified “real potential” for investment in large-scale development of

homes built specifically for private rent by professional organisations

Series of recommendations to speed up the timescale for building the

private-rented homes needed to meet existing and growing demand

Taskforce set up to encourage and support build-to-let investment from

the private sector

Targeted interventions to encourage the development of Build-to-Let

business models

Progress to date

Programme to deliver up to 10,000 new PRS homes and to

demonstrate that there is an appetite to deliver rental properties on a

large scale

Government investment of £1 billion in a Build to Rent Fund, which

will provide development finance for purpose-built private rented

housing.

A £10 billion debt guarantee scheme to support the provision of

these new homes; and up to 30,000 additional affordable homes.

Independent private sector delivery and growing confidence in the

PRS market

Build to Rent Fund Government provides development finance to help schemes to

build, manage and let properties

Objective is to invest in viable projects which will create a step-

change in the supply of homes for private rent

Investment could be used to cover costs such as land, construction

or management costs. Post stabilisation period, the developer will

sell on their interest or re-finance and repay the investment

Established as a £200 million pilot fund, which was increased to

£1bn in the 2013 Budget announcement

Market appetite Strong demand for the fund - propositions taken forward through

Round 1 and Round 2 are now being contracted

Around £4 billion worth of bids received in response to both

competition rounds – mix of ‘delivery ready’ and medium term

propositions

Scale and nature of the bids received reflected the developing

interest and maturity of the PRS market

Government funding replaced with private sector solutions in some

cases – a “success”

Increasing evidence of development of PRS market through:

– Levels of institutional investment

– Greater availability of private sector debt funding

– Creation of more dedicated PRS vehicles

Messages to the market

Build to Rent Fund continuing to support creation of the PRS market

– Continuous market engagement

– Priority will be given to propositions that offer the most attractive

prospects for institutional investment going forward. The best bids will

be successful in securing remaining funding

Continuing support from the PRS Taskforce until March 2015

PRS Housing Guarantees available to assist with long term holding

investment in properties once construction is completed