Large Midlands group secures £235m through sustainability-linked loan
Platform Housing Group, the large Midlands-based landlord, has secured £235m through a sustainability-linked loan to build more homes and decarbonise its stock.
The 47,000-home group, which is one of the biggest developers in the sector, agreed the loan with Lloyds Bank. It is the bank’s largest loan of its type to the social housing sector, according to Platform.
The five-year loan is partly new and partly refinanced, with variable interest rates linked to the sterling overnight index average (Sonia).
Platform raised £250m through its first sustainability-linked bond last September. The latest deal adds to a trend of housing associations using their environmental, social and governance (ESG) credentials to attract finance from private funders keen to invest in organisations seen as doing a social good.
Under the new loan with Lloyds, Platform will be measured on three key performance indicators (KPIs) covering energy efficiency and apprenticeships to secure margin discounts.
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The first is aimed at lowering the carbon footprint of its existing homes by investing in the fabric of buildings and “low-carbon technologies” to heat and power homes.
The second KPI will require Platform to deliver energy-efficient new homes as it looks to build around 1,500 homes a year. Platform said this will be helped by the £250m grant it got from Homes England in the latest Affordable Homes Programme. As part of this, it will build 4,600 new homes – a quarter using modern methods of construction.
The final KPI is linked to the association committing to increase the proportion of its workforce in apprenticeships by 0.5% every year for the next five years.
Rosemary Farrar, Platform’s chief financial officer, said: “We’re proud that our ambitions cover a range of ESG objectives and will deliver a housing portfolio that benefits the communities we operate in across the region.”
In its last half-year to the end of September 2021, Platform reported a 14% drop in operating surplus, to £46.9m, off an increased turnover of £150.5m.
Platform was formed in 2018 through the merger of Waterloo Housing and Fortis Living.
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