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Homes England supports £40m lease deal involving council
Homes England has provided funding to support a £40m lease deal between a property fund and a local authority.
Stoke-on-Trent City Council has signed a deal with Cheyne Capital’s Social Property Impact Fund to deliver 379 affordable homes on brownfield land in Stoke.
The council plans to lease the homes, which will be built in the Hanley area of the city, from Cheyne over a 40-year period.
Cheyne will buy the land and fund the development and build at two sites, with Homes England, the government’s housing delivery agency, providing funding so that the homes can be let at affordable rent.
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Stoke’s repairs and maintenance company, Unitas, will be responsible for maintaining the properties and at the end of the 40-year lease period, the council will have the option to buy the homes for £1.
Randy Conteh, cabinet member for housing, communities and safer city at Stoke Council, said: “This project is really exciting. We have worked in a completely new and innovative way to put forward a programme of work that will deliver the multimillion-pound regeneration of two areas of the city in need of attention.
“It is a project that we do not have the public funds available to lead alone; but by working collaboratively with the private sector we can raise the quality of accommodation and life of hundreds of families and rejuvenate communities.”
This is the second lease deal Homes England has supported recently, following hot on the heels of a deal struck between the housing association Partners Foundation and the private equity fund Funding Affordable Homes.
Caroline Cormack, head of homeownership and supply in the Midlands for Homes England, said: “We welcome Stoke-on-Trent City Council’s ambitions for this development and are excited to be working with them to explore the best solutions for both of these sites to accommodate the housing needs of the local communities.”
Darren Carter, investment director for social property at Cheyne Capital, added: “We know that partnering socially responsible capital with councils and government agencies can accelerate the delivery of high-quality, affordable and inclusive homes to communities that need them most.
“We were impressed by Stoke-on-Trent Council’s progressive attitude towards addressing their housing needs and are excited to be involved in this landmark project.”
Cheyne has previously struck a deal with South Yorkshire Housing Association and has also purchased residential properties for supported and specialist housing.
The fund struck a co-operation deal with the National Housing Federation in 2016 to promote its lease-based finance to the sector.
