Yorkshire housing provider loaned £20m through the Affordable Homes Guarantee Scheme

54North Homes has received a £20m loan under the Affordable Homes Guarantee Scheme (AHGS) to support its delivery of new affordable homes across Yorkshire.

Managed by ESR Group’s specialist investment manager Venn Partners on behalf of the UK Government, half of the loan will help 54North Homes deliver about 100 new homes, with the majority for social rent.

The remaining £10m will facilitate investment in 54North Homes’s existing properties, advancing improvement works and decarbonisation.

Mark Pearson, Managing Director of 54North Homes, said: “We’re pleased to be benefiting from the Affordable Homes Guarantee Scheme, which will enable us to provide more good quality affordable housing across Yorkshire.

“We’ve an ambitious growth programme – and the loan will provide us with a welcome boost to develop a wide range of homes that will meet customer needs and strengthen local communities.”

54North Homes, an independent subsidiary of the Karbon Homes Group, has invested more than £26.5m in the delivery of new homes over the last 18 months.

The AHGS, which aims to provide lower-cost, fixed-rate debt to registered providers to increase affordable homes supply, will play a key role in 54North Homes’s delivery of about 150 homes over the next three years.

Oriane Auzanneau, Deputy Portfolio Manager for the AHGS and Managing Director at Venn Partners, commented: “We’re delighted to welcome 54North Homes to the Affordable Homes Guarantee Scheme as part of this transaction.

“Given the increasing Gilt rates over the last two months, this outcome demonstrates the continued attractiveness of funding under the scheme, even at longer tenors, to support the sector’s affordable development pipelines and investment programmes.”

Loans under the scheme, which reopened in March last year with an additional £3bn, are funded by a bond issuance programme backed by a guarantee from the UK Government. This presents a cost-effective source of mid-to-long-term borrowing for the social housing sector as the lower pricing is passed on to borrowers.

The loans are funded by the issuance of further bonds under the scheme’s existing 2053 bond series. The sale of the bonds, which completed in mid-December, are guaranteed by the UK Government and achieved an attractive all-in rate of under 5.15%.