Octopus Real Estate completes multiple Greener Home Alliance loans totalling over £15m

By Bridging Loan Directory 11th October 2023

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

The four completed loans total more than £15m and will fund the development of dozens of new homes in Guildford, Norfolk, Harrow and Winchester – to be delivered by four SME developers.

In Guildford, Surrey, the Alliance is supporting the development of five high quality family homes, designed to have low environmental impact, with the developer targeting an EPC A rating through the provision of solar panels and installing electric vehicle (EV) charging points to all the units.

The second loan will finance the ground-up development of 16 private units in Norfolk, with a targeted EPC B rating as a minimum.

The development will also support EV chargers and Mechanical Ventilation Systems (MEVs). MEVs improve indoor air quality, reduce the risk of condensation, mould and damp, and contribute to lower energy costs.

The development in Harrow, Greater London, will transform a site currently used as a car garage into 38 residential properties; 22 flats, six houses, plus two commercial units.

On the fourth site, in Winchester, Hampshire, the Alliance is supporting the delivery of eight family homes. Both sites will feature air source heat pumps and solar panels.

Nick White, Head of Development Origination, Octopus Real Estate, said:

“The Greener Homes Alliance initiative was created with the purpose of supporting developers to make greener decisions for their projects.

The completion of these four loans is a fantastic representation of how this initiative is working, with homes being built that will meet new standards to reduce energy use and carbon emissions.

We are extremely proud of the impact we’ve made thus far through our partnership with Homes England.

As a B Corp, Octopus Real Estate is committed to future proofing developments and accelerating green initiatives within the property market.”

Andy Scott, Head of Development Lending, Octopus Real Estate, commented:

“Our Alliance with Homes England continues to be popular among SME developers.

We’ve recently hit an exciting milestone for the Alliance; we’ve now received redemption funds on three of the 12 loans we’ve provided since we launched the initiative, and the developed schemes are beginning to sell.

One of the schemes in Bristol – developed by Autograph Homes – is achieving SAP scores of over 100, which is a fantastic result for the Alliance, the developer, and the new residents of the properties.”

The Greener Homes Alliance, formed with the Government’s housing and regeneration agency Homes England, 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%.