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Landlord outlines new homes and retrofit ambitions with £50m sustainability-linked loan

A Hertfordshire-based housing association will improve the energy efficiency of its existing stock and build hundreds of new homes after a £50m sustainability-linked loan from a major bank.

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A B3Living development in Cheshunt
A B3Living development in Cheshunt
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The loan to B3Living forms part of Lloyds Bank’s own target to support the UK’s delivery of one million new social homes by 2033 #UKhousing

B3Living has borrowed the multimillion-pound sum from Lloyds Bank to help deliver on its housebuilding and retrofit targets. 

The sustainability-linked loan facility will be measured against three key performance indicators (KPIs), which will see the 5,000-home landlord receiving discounted funding based on its performance against those KPIs.

The first KPI relates to retrofitting existing stock to ensure it is going above and beyond the current minimum regulations to bring all B3Living’s properties up to at least Energy Performance Certificate (EPC) Band C by 2028.

The landlord pointed out that achieving this aim would put it two years ahead of schedule, and aligns to B3Living’s wider strategic target to help support homeowners and tenants to reduce energy costs.


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The second KPI involves improving its rating under SHIFT, the sustainability framework that amalgamates 15 separate environmental, social and governance (ESG) KPIs into one score, from Silver to Gold by 2024. 

The last aim is to build at least 50 energy-efficient, affordable new build homes a year by 2028, of which 70% will be in Broxbourne, to help tackle the ongoing shortage of affordable housing in the borough. 

The new homes will be built to EPC B specifications and above. 

Alex Shelock, chief financial officer at B3Living, said: “In this current operating environment of high inflation and rising interest rates coupled with political and economic uncertainty, organisations like ours have a tough balancing act in terms of protecting financial resilience whilst delivering for our customers and communities. 

“The transition towards net zero carbon is a key strategic priority for B3Living, and this type of flexible and incentivised loan is an excellent avenue for us to stretch our ESG ambitions and deliver benefits for existing customers as well as those yet to be housed.”

The landlord has been a customer of Lloyds Bank since 2015, and the loan forms part of the lender’s own target to support the UK’s delivery of one million new social homes by 2033.

Lauren Bailey, associate director of real estate and housing at Lloyds Bank, said: “The work that organisations like B3Living does is incredibly important in the UK’s efforts in tackling climate change and making our current and future housing stock fit for the future while addressing the supply challenges the residential property market currently faces.”

B3Living was advised by the banking team at law firm Winckworth Sherwood.

Lucy Grimwood, social housing finance partner at Winckworth Sherwood, said: “Funding agreements with interest rates linked to sustainability targets are increasingly commonplace and can provide great opportunities for social housing providers as the sustainable finance market develops.”

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A block of flats under construction
Picture: Alamy
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