US-based debt investment firm Crestline Investors has provided a £20 million credit finance facility to Rentplus, a company that focuses on providing affordable homes in the UK.
Under the terms of the loan, Rentplus will be able to access the credit over the next two years with the option of further accessing £20 million from the debt fund.
The loan will assist Rentplus in hitting its target of building 5,000 homes in the UK by 2020. The latest financing follows BAE Systems Pension Funds Investment Management’s investment of £70 million into its scheme.
Properties in the Rentplus scheme operate across a five, 10, 15 and 20 year interval period, charging rents to tenants at 80 percent of the market rate. Following the conclusion of a fixed-term contract, the tenant has the option to buy a home with a 10 percent gifted deposit priced into the purchase. Further plans to build homes are under way across the South West of England.
Michael Guy, Crestline chief investment officer, said: “Rentplus has developed an innovative model which requires innovative funding to be deployed immediately in order to meet current demand.”
John Gildersleeve, chairman of Rentplus, said: “This additional funding is further testament to the faith in both our business model as well as our ability to deliver new, affordable homes and an alternative route to home ownership. With deposits being the greatest barrier to home ownership, we are seeing interest from local authorities, developers and housing associations.”