Homes England and Octopus Real Estate are launching the second phase of their scheme to encourage greener building practices
The Greener Homes Alliance phase 2 will see £150m of funding to support SMEs in building more efficient homes.
£42m of the total is being given by Homes England’s Home Building Fund.
The Greener Homes Alliance phase 2 will enable SME housebuilders to build more homes
The aim of this phase of the plan is to provide SMEs with more ability to construct higher-quality and more energy efficient homes.
The plan was originally launched with phase 1 in 2021, and the funding led to the construction of more than 550 sustainable homes, with over 40% achieving an EPC rating of A, and all of them had a Standard Assessment Procedure score of 86 or higher. The UK average EPC score is D, and the average SAP score is 67.
Phase 1 consisted of 20 loans totalling £150m, an average of £7.5m per SME developer.
Phase 2 seeks to replicate this but has ten new criteria, of which four must be fulfilled before an SME can secure a loan with a 1.25% interest rate discount. If an SME meets six or more of these criteria, the discount raises to 2%.
Some of the criteria for phase 2 include using mixed methods of construction when building, paying workers a real living wage, and supporting the Lighthouse Charity for mental health in the industry.
The key criteria to qualify, however, is delivering on key performance indicators, such as all homes built must be free of fossil-fuels and must have an SAP score of 85 or more.
“Crucial to building a diverse and resilient housing sector”
Writing for PBC Today last month, Edward Jezeph of Homes England discussed the use of MMC in housebuilding, and how it is important to facilitate a cultural shift in their introduction into housebuilding, such as removing the traditional isolation between designers, contractors, and suppliers, as well as introducing more green and sustainable practices.
This scheme is a reflection of that commitment by Homes England.
Marcus Ralling, chief investment officer at Homes England, said: “Small and medium housebuilders play a vital and essential role in driving the delivery of much needed, new and sustainable homes.
“This extended Alliance is an excellent example of how we are working with partners like Octopus Real Estate to support the SME housebuilders that are crucial to building a diverse and resilient housing sector.
Andy Scott, co-head of debt at Octopus Real Estate, said:
“We are extremely proud of the impact our Greener Homes Alliance initiative has had when it comes to supporting developers looking to make greener decisions for their projects, and we’ve spent a lot of time working out the new criteria with Homes England to make sure the next phase is as impactful as possible.
“At Octopus, our mission is to reimagine real estate through the delivery of high-quality, sustainable places for people to live that are fit for the future and address societal needs such as fuel poverty. Working with esteemed government agencies to enact real change for the developers who have the expertise and capability to deliver such homes is a huge part of this.”
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