Newham Council has agreed a partnership that will provide 161 affordable homes for Newham families.
The arrangement will see Pension Insurance Corporation plc (‘PIC’), a specialist insurer of defined benefit pension schemes, make an £83 million investment in partnership with the London Borough of Newham to fund the construction of 161 homes, to help deliver the council’s housing strategy.
The investment, which is made via a Regeneration Lease, will fund the regeneration of a brownfield, industrial site in Silvertown near London City Airport to permanently re-home local families, with up to 50% of the properties made available for affordable housing.
The arrangement will see work commence on the homes in July and is a key part of delivering Newham’s housing strategy, which is being partly delivered by acquiring large scale development to provide much needed affordable homes.
Projects funded using the Regeneration Lease model offer benefits to residents by increased employment and significant spend in the local economy during construction. The Regeneration Lease structure provides PIC with long-term, inflation-linked cash flows which will be used to pay the pensions of its policyholders over coming decades.
Councillor Terence Paul, Lead Member for Finance & Corporate Services at Newham Council, said: “This arrangement with PIC allows us to build these much needed houses now. This is a sensible and effective use of scarce public funds to provide real assets for Newham residents by building housing and also stimulates jobs and opportunity in our local economy.
We are delighted to have PIC working with us on this project as they have the expertise and the focus to make the project a success over the coming decades.”
The strategy will not only provide secure and good quality housing for residents currently in temporary accomodation, but also provide the council with a rental income and a stock of well-maintained, environmentally friendly properties for decades to come, which the council has the option to purchase for £1 at the end of the 50 year lease.
Projects funded using the Regeneration Lease model offer benefits to all stakeholders throughout their lifecycle, for example through increased employment and significant spend in the local economy in the short-term during construction.
James Agar, Head of Long Income at PIC, said: “We are pleased to have completed our second Regeneration Lease investment, which will help LBN tackle the financial costs and the long-term social impact of the housing shortfalls within the Borough.
“As purposeful investors, we need our investments to provide secure cash flows to back our pension payments to our policyholders over the coming decades, so it’s vitally important that they generate considerable social impact in the short term and value in the long term.”
“I look forward to working with LBN and our development partners Reef on this important development.”