Greener Homes Alliance enters phase two

The partnership between Homes England and Octopus Real Estate will support small and medium housebuilders with £150m of funding.

£42m of the funding will come from the agency’s Home Building Fund and the rest will be provided by Octopus, which is part of Octopus Investments.

The Greener Homes Alliance was launched in 2021 and encourages developers to use greener building methods.

Since its inception, the GHA has made 20 loans totalling £150m, with an average loan size to SME developers of £7.5m.

Of the developments it helped to fund, more than 40% of the 550 homes achieved an EPC of A.

Phase two of the GHA will introduce 10 new criteria. If developers meet four of these, they will receive a 1.25% discount on their interest rate.

Matching six or more makes SMEs eligible for a 2% discount.

The criteria for phase two will include the use of mixed methods of construction in buildings and a real living wage paid to workers on site.

It will also encourage borrowers to support the Lighthouse Charity, a leader in mental health within the construction industry.

Andy Scott, co-head of debt, 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.”