Housing trust gets £275m ground-breaking refinancing deal
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Trafford Housing Trust has completed a £275m refinancing deal which breaks new ground in the housing association sector.
The new funding for the 9,000-home Trust is a mixed-maturity deal, which introduces a pool of new funders, including institutional investors, and replaces the previous £145m facility.
Some £100m of new funding is available for on-lending to innovative joint ventures fuelling the Trust’s ambitious home-building plans, including the 50/50 house building joint venture with L&Q, one of the country’s largest housing associations.
The two organisations will each invest £80m to deliver 2,000 homes across the North West in the next four years.
Trafford Housing Trust was created from a transfer of Trafford Borough Council housing stock in 2005 and has been developing new homes since 2011.
Its 2015-16 turnover was £54.4m with operating surplus of £12.4m (net surplus £5.4m) and it has developed nearly 500 new houses since 2011, 430 of which are affordable. The new deal enables the Trust to operate on a much greater scale.
Its ‘profit for purpose’ policy sees development income ring-fenced from rented stock and used to re-invest in development, including affordable housing, mixed-use and assisted living new build projects delivering social impact in Trafford and increasingly across the North West.
The Trust has development partner status with the Homes and Communities Agency and was the first housing association to access funding from the £300m Greater Manchester Housing Investment Fund. It also develops and sells homes independently through its Laurus brand.
In addition, the Trust is part of the JV North housing consortium, a northern and midlands partnership of ten housing associations. JV North recently received £87.3m grant from the Homes and Communities Agency’s Shared Ownership Affordable Homes Programme towards the consortium’s next wave of housebuilding.
The Trust’s deputy chief executive and chief financial officer Larry Gold saidys: “Trafford Housing Trust is a financially strong group of companies and this deal demonstrates great confidence among funding institutions in the Trust’s governance, leadership and ambitious growth strategy.
“The housing crisis means that in Greater Manchester alone supply of new homes is around 4,000 annually, compared with a projected need of over 11,000 a year for each of the next ten years.”
Helen Rourke, director of finance, said: “The refinancing gives the Trust more control over our assets and greater potential to invest in our strategy to deliver better homes for residents and significant numbers of new homes of all types across the North West.”
The refinancing deal was arranged by Savills Financial Consultants and involves Lloyds Bank, BlackRock, Pension Insurance Corporation and Yorkshire Building Society.