Octopus and Homes England form Greener Homes Alliance

The Greener Homes Alliance will commit £175m, providing both loan finance and expert support to SME housebuilders.

Octopus and Homes England form Greener Homes Alliance

Octopus Real Estate, part of Octopus Group, has partnered with Homes England, the government’s housing delivery agency, to create the Greener Homes Alliance.

 

The Greener Homes Alliance will commit £175m, providing both loan finance and expert support to small to medium (SME) housebuilders, with the goal of enabling them to build more high quality, energy efficient homes throughout England.

As part of its broader efforts to expand the supply of finance available to SMEs, Homes England will provide £46m of the £175m.

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

The homes funded must achieve a minimum Energy Performance Certificate (EPC) rating of B.

They will then benefit from increased interest rate margin discounts as the energy efficiency of the homes increases above this, as measured using the Standard Assessment Procedure.

Homes achieving an EPC rating of A will benefit from interest rate margin discounts of 2%.

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

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

Loans will be up to a maximum of 85% LTC or 70% LTGDV, to maximum loan sizes of £20m.

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, allowing them to build to higher environmental standards, now and in the future.

Housing Minister Christopher Pincher, said: “We are determined to ensure that our homes are fit for the future and improving energy efficiency is a key part of our ambitions to reach net zero emissions by 2050.

“Our Future Homes Standard will ensure that from 2025 new homes produce at least 75% 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.”

Peter Denton, chief executive at Homes England, added: “This new partnership, the latest in a series of impactful lending alliances, will give smaller housebuilders both the funding and the knowledge needed to build more sustainable homes.

“The Greener Homes Alliance brings developers and lenders closer together, providing affordable finance, improving knowledge sharing and creating new paths to net zero.”

Benjamin Davis, chief executive of Octopus Real Estate, said: “Creating more energy efficient homes across the United Kingdom is vital if we’re to make progress towards net zero.

"Our joint venture with Homes England will help meet this increasingly urgent need to develop more sustainable homes.

"The alliance will provide access to funding and expertise to help developers ‘go green’ when making decisions for their developments.

"Given the public are more in tune than ever before about how energy efficient their homes are, and in turn their own impact on the environment – the opportunity for developers building greener homes is huge.

“As a B Corp, Octopus Real Estate is committed to our impact goals and the opportunity to work with the real estate sector, alongside institutional investors, to create choice for developers to future proof developments and drive the green acceleration of the property market.”