Member Article

Multi-million pound shared ownership boost for London

The Mayor of London has announced a multi-million pound investment for shared ownership in the capital under a partnership from a pair of major institutional investors.

The two investments with Chaco Ltd and Horizon Infrastructure, in partnership with the London Borough of Barking and Dagenham, have been allocated £45m from the Mayor’s First Steps Challenge Fund.

A further £120m from long-term private sector investment will add to the Mayor’s loan funding.

The fund is aimed at attracting investment from institutions such as pension funds and insurance companies to build part-buy, part-rent housing for low and middle income Londoners.

The Mayor’s First Steps scheme has so far helped 52,000 Londoners to buy a home, with typical household incomes of £40,000, and some deposits as low as £5,000.

In addition the Mayor has instructed the GLA to explore purchasing land in areas, such as Housing Zones, where the shared ownership model could be expanded.

Mayor of London Boris Johnson MP said: “This scheme is a brilliant way to open up home ownership to Londoners on modest incomes, making the first step on the property ladder just that little bit easier. “We’ve already helped 52,000 Londoners to buy their first home and realise their dream, and I’m very pleased that the first institutional investors have come on board through my First Steps Challenge Fund. This is a great vote of confidence in a housing model which is incredibly popular with consumers, and we need to see more of it in London.”

The first investment under the First Steps Challenge Fund scheme will be delivered in partnership with the London Borough of Barking and Dagenham and Horizon Infrastructure, and result in up to 500 new shared ownership homes delivered in the borough by 2020.

The Greater London Authority will contribute £22.5m to the development, which will be added to by pension funds and other institutional investors, and repaid within 15 years with interest.

The second investment will be delivered in partnership with Chaco Ltd, an organisation that provides institutional non-bank funding for housing associations and registered providers, to build 500 new shared ownership homes across London.

Chaco Ltd has existing relationships with investors such as Aviva, CBRE and M&G Investments and it is hoped that this funding can help to stimulate further investment from these organisations into the sector.

The Greater London Authority will provide another £22.5m to this project, which will be added to by the private sector and repaid over time. Chaco Ltd are working with housing association partner Genesis to develop a structure to deliver the units.

This was posted in Bdaily's Members' News section by Ellen Forster .