Greener Homes Alliance proves popular with SME developers eager to go greener

By Bridging Loan Directory 18th August 2022

Octopus Real Estate, part of Octopus Group and a leading specialist real estate lender and investor, announces today that it has recently completed four pioneering loans as part of its Greener Homes Alliance initiative with Homes England.

The four completed loans total in excess of £26m and will fund developments of 80 new homes in Bristol, Sussex, Cambridgeshire and London – to be delivered by Autograph Homes, Turnbull Homes, Blues Property and Albemarle Proma Ltd respectively.

The development financed by the Greener Homes Alliance for developer Autograph comprises 30 houses in Cribbs Causeway, Bristol. Eight of the properties will be affordable.

Autograph will be developing EPC A+ and A homes, aiming for an SAP score of 92. The development will utilise low carbon technologies such as PV panels, air source heat pumps, electric vehicle charging points and the optional extra of a home battery – a large battery that you have installed at home to store excess electricity – to reduce bills and carbon even further.

The Albemarle Proma loan, of £10.5m, is on a site in Beckenham, Greater London, and will fund the development of 27 homes, utilising PV panels and quality insulation, as well as the inclusion of multiple EV charging points for residents.

The Alliance, formed late last year with the Government’s housing and regeneration agency, pledged to commit £175 million in providing both loan finance and expert support to SME housebuilders, enabling them to build more high quality, energy efficient homes throughout England.

Homes funded must achieve a minimum Energy Performance Certificate (EPC) rating of B, with developers benefiting from increasing interest rate margin discounts on the loan as the energy efficiency of the homes increases above this (as measured using the Standard Assessment Procedure [SAP]).

Homes achieving an EPC rating of A benefit from interest rate margin discounts of 2%. The four deals completed since May have the potential to amount to combined savings of over £500,000.

Harry Swales, Chief Investment Officer at Homes England, said:

“This recent milestone demonstrates the impact the Greener Homes Alliance has had on the market, and the appetite of SME developers to build more energy efficient homes is clear to see.

We’re sure that the alliance will continue to provide SMEs with a route to finance that may otherwise be unavailable, to help them build the homes of the future.”

Benjamin Davis, CEO of Octopus Real Estate, commented:

“We’re thrilled that our joint venture with Homes England is helping to meet the increasingly urgent need to develop more sustainable homes across the UK.

By working together with Homes England, McBains and Octopus Energy, we are providing unprecedented access to both funding and expertise to help developers make greener decisions for their projects.

“Creating more energy efficient homes is vital if this country is going to make progress towards net zero.

As a B Corp, Octopus Real Estate is committed to reimagining real estate by future proofing developments and driving the green acceleration of the property market.”

Andy Scott, Head of Residential Development at Octopus Real Estate, commented:

“Demand for greener finance products for housebuilders has never been higher; developers and housebuilders are more focused than ever on delivering more energy efficient and futureproof homes.

This drive for greener homes is also coming in the form of recent changes to building regulations, including new standards to reduce energy use and carbon emissions.

The discounts that we can provide through this alliance will help developers to offset the additional costs associated with these changes.

As a team, we’re incredibly proud of the tangible difference our Greener Homes Alliance is already making to developers and society at large.

With the latest news surrounding rising energy prices, consumers are more astute than ever when it comes to the energy efficiency of their homes.

Through this initiative, we are helping developers pass on cost savings over the long term to homeowners, whilst collectively making a significant impact in terms of tackling the climate emergency.”

As part of the offering, the four SME developer borrowers, Blues Property, Turnbull Homes, Autograph Homes and Albemarle Proma, also benefit from free of charge, expert advice from sustainability consultants McBains and Octopus Energy – the United Kingdom’s leading 100% renewable energy supplier and part of the Octopus Group.

McBains has been providing the developers with design guidance and practical steps to achieve improved EPCs.

Together, Octopus Energy and McBains recommend new technologies, suppliers or building techniques to help developers maximise the energy performance of their buildings.

This education and support is available for developers to call on both during the work on their current schemes and in the future.