Institutional investor in deal to provide council homes
Wed 22nd February 2012, 7:40 pm
A London council has signed a deal to use private institutional investment to fund affordable homes.
The London Borough of Barking and Dagenham will work with contractor Laing O’Rourke to deliver 477 new homes in Barking town centre, with funding secured through a partnership agreement with institutional asset developer Long Harbour. The council claims that the deal is the first time in the UK council housing has been provided using private investment.
Phil Waker, cabinet member for housing at Barking and Dagenham Council, said: “This is a tremendously exciting and innovative scheme which will deliver much-needed new homes for the people of this borough."
Each of the 477 properties will be available to at affordable rents, at between 50 and 80% of local market rates. The scheme will be entirely self-financing from the rents paid over the term of the lease, with all properties automatically transferring into full council ownership at the end of the lease period.
A spokesman for Long Harbour said: “Barking and Dagenham is a fast-evolving borough that is ripe for investment and will benefit from the regeneration of these two sites. This deal is a clear demonstration of the council’s can-do attitude.”
The first homes will be available in about 18 months, with the entire scheme expected to be completed within three years.
Legal advice for the transaction was provided by Trowers & Hamlins for the London Borough of Barking & Dagenham, CMS McKenna for Laing O’Rourke, and K&L Gates for Long Harbour.
The council claims that it is the first in the country to fund new homes using institutional investment.