Muse MD Phil Mayall said the government has set out a "bold and ambitious challenge". Credit: Place North

Affordability-focused development vehicle Habiko launched

4 November 2024 11:44 Neil Tague Comments (0)

Pension Insurance Corporation, Muse, and Homes England have formed a £54m joint venture, tasked with bringing forward 3,000 low-carbon, low-energy affordable homes for rent.

Habiko is intended to become self-funding over its 12-year lifespan and aims to diversify the supply chain for future efficient housing developments, the partners said.

The partnership will look to unlock institutional investment for rental market homes and will focus 100% of affordable homes for rent, for those whose needs are not met by the market, with rents set at 20% below the local market rent.

During the lifespan of the partnership, housing and infrastructure investor PIC will have the ability to continue to forward-fund the development of affordable homes and will ultimately own the homes and places brought forward.

The Habiko partners said that the homes will be built across England in areas of high demand for “this type of housing”.

Items on the checklist are that homes should be in accessible locations, close to employment opportunities and be designed to help residents save money on their energy bills.

The partnership, and the government’s £25m investment in it, was trailed ahead of the Budget last week as the government pushed once again its seriousness in addressing the affordable homes issue.

Tracy Blackwell, chief executive of PIC, said: “Meeting the UK’s affordable housing needs is a challenge that is best met through effective collaboration between government, developers, and private investors.

“Habiko is a great example of public-private partnership, which brings forward thousands of low-carbon, low-energy affordable homes.

“PIC has invested around £4bn in social and affordable housing to date, helping provide the secure, long-dated, inflation-linked cashflows to back the pensions of its policyholders over coming decades, creating considerable social value.”

Phil Mayall, managing director of developer and placemaker Muse – a deeply experienced operator in public-private long-term development through its ECF regeneration work with Homes England and L&G – said:

“The government has set out a bold and ambitious challenge to deliver a significant number of new affordable homes over the next five years.

“Working together with PIC and Homes England, we can bring together our collective resources and unique experience to deliver thousands of low carbon and low energy homes which, by working alongside our local partners, meet the needs of communities across the country.”

Peter Denton, chief executive of Homes England, said: “Attracting institutional investment into the housing sector is critical to build the new homes the country needs.

“This partnership supports our partners’ objective to deliver low carbon, low energy, affordable homes, bringing together the technical expertise and capability of Muse with the financial capacity of one of the UK’s largest pension fund insurers, cementing PIC as a significant force in delivering affordable housing.”