Sovereign Housing Association has raised £375m (€436m) via a bond issue to help build new homes.

The UK housing association said the bond – which was well-oversubscribed at £1.2bn – will support its investment in the quality of its homes and services, as well as building nearly 2,000 new homes a year through a more land-led approach.

The 29-year £375m bond includes a £125m retained element to issue at a later date, Sovereign Housing said.

Sovereign Housing, which has around 58,000 homes across the south of England, said by retaining £125m of the bond, it will have fast and flexible access to further investment in the future should it be required.

Tracey Barnes, Sovereign Housing Association’s CFO, said: “This is an excellent result and will allow Sovereign to continue to do more for people and places, delivering our ambitious plans and maximising our social impact.

“The strong book build and overwhelming appetite from investors really confirms Sovereign Housing’s standing and financial strength, particularly given these turbulent economic and political times.”

The latest bond is Sovereign Housing’s third UK public bond issue, following subsequent issues in 2012 and 2009.

Dominic Brindley, head of public sector at NatWest markets, said: “The size and depth of the order-book and the overall outcome is a great reflection of Sovereign’s sector-leading credentials which bodes well for future issuances.

”This approach to financing is testament to the support that the bank offers issuers in navigating both the bank and capital markets.”

Kirsty Garrett, associate director, debt capital markets, Lloyds Bank, said: “The Lloyds Bank team was delighted to work with Sovereign on its first transaction in over seven years.”

Garrett said investors were attracted to Sovereign’s scale, A2 / A+ credit rating and regional presence.