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Aggregator completes first MMC charging exercise to secure £75m loan
A housing association debt aggregator has completed its first charging exercise involving homes built using modern methods of construction (MMC).
The Housing Finance Corporation (THFC) charged 844 offsite manufactured properties to its subsidiary, Blend Funding, to secure a £75m loan with GreenSquareAccord.
The loan was originally drawn down in July 2021 and was later converted to be THFC’s first sustainability issuance in November.
The valuations of the offsite properties, which included more than 100 timber-frame units produced by GreenSquareAccord’s offsite manufacturer LoCal Homes, were carried out by Savills.
MMC has become increasingly popular with house builders and housing associations in recent years. Several housing associations have invested in new modular factories or signed partnerships with modular builders.
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Traditionally lenders have been wary to accept modular homes as security, however THFC announced in 2020 that it would start accepting homes built using MMC in order to monitor its performance over time and bring it in line with traditional forms of security.
Uptake of MMC has been slow in the UK compared with other parts of the world, however THFC said in a release that recent government policy shifts have led to a renewed focus on the technology.
Government policy now states that a quarter of homes funded by the new Affordable Homes Programme, which launched in April last year, must be built using MMC.
Piers Williamson, chief executive THFC, said: “It is clear that these methods, whether they involve volumetric or panellised modular housing, are going to be a permanent feature of construction in the future.
“We see it as our duty as the sector’s leading aggregator to work with borrowers to ensure that the sector’s lenders adjust their security policies appropriately to ensure that its pioneers are not unfairly penalised.”
James Tarrant, director of corporate finance and treasury at GreenSquareAccord, said the association is committed to playing its part in reaching net zero carbon.
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