Octopus Real Estate and Homes England create £175m green lending partnership

  • 21/10/2021
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Octopus Real Estate and Homes England create £175m green lending partnership
Octopus Real Estate has partnered with Homes England to lend £175m of discounted loans to SME developers building energy efficient homes in England.


As part of the Greener Homes Alliance with Octopus, Homes England will provide £46m of the £175m of loan finance.

The alliance will provide loans of between £1m and £20m to finance new SME development projects.

Loans are capped at 85 per cent Loan to Cost or 70 per cent Loan to Gross Development Value.

Homes funded must achieve a minimum Energy Performance Certificate (EPC) rating of B and will benefit from increasing interest rate margin discounts as the energy efficiency of the homes increases above this, measured using the Standard Assessment Procedure.

Homes achieving an EPC rating of A will benefit from interest rate margin discounts of two per cent.

The alliance will support the construction of up to 750 new homes whilst also equipping SME housebuilders with knowledge and expertise around low carbon construction.

Before starting their developments, SMEs will benefit from free of charge advice from sustainability consultants McBains and Octopus Energy.

McBains will provide design guidance and practical steps to achieve an improved EPC.

Housing Minister Christopher Pincher MP said: “Our Future Homes Standard will ensure that from 2025 new homes produce at least 75 per cent lower CO2 emissions and be future-proofed with low carbon heating.

“This partnership will help reach our targets for cleaner, greener homes for future generations.”

Andy Scott, head of residential development at Octopus Real Estate, said: “Although green credentials may be an aspiration for most developers, sometimes access to funding, costs and education can stand in the way of these aspirations. The alliance will offer tangible discounts which can help fund the costs to support the delivery of green developments, plus access to advice and education, which will enable SME housebuilders to deliver future proof, energy efficient homes to be enjoyed for generations to come.”

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