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Landlord lines up extra £25m loan with aggregator to fund housebuilding
Housing association Ongo has lined up an extra £25m in funding through an aggregator to help with its development plans.
The 11,000-home landlord, which was exploring a merger with a neighbour before plans were dropped late last year, has agreed the deal with Blend, a subsidiary of The Housing Finance Corporation (THFC).
It brings the total amount that Scunthorpe-based Ongo has borrowed through Blend to £75m, after a previous £50m loan was arranged in 2021.
The interest rate on the new loan will “depend on market conditions”, a THFC spokesperson told Inside Housing. “They [Ongo] do not need to lock in now, but if they think rates are attractive then they can decide to lock in but defer the funding [at that locked in rate] until later,” the spokesperson added.
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The term length of the loan will be agreed between Ongo and Blend when the landlord decides to draw on the funds, the spokesperson said.
Ashley Harrison, director of resources and commercial services at Ongo, said: “Having identified the need for additional, flexible funding facilities to underpin Ongo’s continuing development plans and aspirations, the product that Blend were able to offer met our funding needs and gave the added benefit of working again with a current and trusted partner.”
The landlord is currently aiming to build 225 homes a year, while investing £120m into its existing stock over the next 10 years.
In its last full year to the end of March 2023, Ongo reported an 11% drop in post-tax surplus to £6.6m, off an increased turnover of £52m.
Ongo and neighbouring landlord Lincolnshire Housing Partnership announced in September that they were in merger talks.
However, less than three months after the plans were made public, the association announced the tie-up would not proceed on the basis they would “best serve residents” by remaining separate.
Ongo, which operates across Lincolnshire, Yorkshire and the surrounding areas, currently has a G1/V1 rating with the Regulator of Social Housing.
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