Pension Insurance Corporation (PIC), place maker Muse and Homes England have teamed up to form a £54m joint venture development vehicle to bring forward 3,000 low-carbon, low-energy affordable homes for rent.
The new public-private partnership, named Habiko, intends to unlock institutional investment in affordable homes. Habiko will become self-funding over its 12-year lifespan and aims to diversify the supply chain for future efficient housing developments, the partners said.
They added that rents will be set at 20% below the local market value. During the 12-year lifespan of the partnership, PIC will have the ability to continue to forward fund the development of the affordable homes and will ultimately own the homes and places they have helped to create.
The homes will be built across England in areas of high demand for this type of housing.
Tracy Blackwell, CEO of PIC, said: “Meeting the UK’s affordable housing needs is a challenge that is best met through effective collaboration between Government, developers, and private investors. Habiko is a great example of public-private partnership, which brings forward thousands of low-carbon, low-energy affordable homes.
“PIC has invested around £4bn in social and affordable housing to date, helping provide the secure, long-dated, inflation linked cashflows to back the pensions of its policyholders over coming decades, creating considerable social value.”
Phil Mayall, managing director at Muse, said: “The Government has set out a bold and ambitious challenge to deliver a significant number of new affordable homes over the next five years. Working together with PIC and Homes England, we can bring together our collective resources and unique experience to deliver thousands of low carbon and low energy homes which, by working alongside our local partners, meet the needs of communities across the country.”
Peter Denton, chief executive of Homes England, said: “Attracting institutional investment into the housing sector is critical to build the new homes the country needs.
“This partnership supports our partners’ objective to deliver low carbon, low energy, affordable homes, bringing together the technical expertise and capability of Muse with the financial capacity of one of the UK’s largest pension fund insurers, cementing PIC as a significant force in delivering affordable housing.”
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