M&G Investments provides £85m for housing development

The firm has committed a 35-year loan to a housing provider for the development of new homes.

M&G Investments has provided a long-term £85 million loan to UK-based housing association One Housing. Terms of the 35-year loan could not be established at the time of publication.

The investment company also provided a long-term £50 million loan to the housing association four years ago, Mark Davie, head of social housing at M&G, told PDI. He added housing associations benefit from private lenders since they often don’t want to take on enough debt to issue publically traded securities.

Davie also noted this particular loan is largely backed by shared-ownership properties owned by the housing association. Traditionally, he added, banks haven’t allowed more than 10 percent of loans to be back by such properties.

A spokesman for One Housing confirmed the loan is being used to expand the number of affordable properties developed by the company. In an announcement, One Housing noted it is hoping to develop 1,050 homes for social and affordable rent by 2020.

It is also seeking to enhance its shared ownership scheme and develop 400 properties for market sale during this time frame. The loan will also enable the company to maintain more liquidity and take advantage of potential opportunities which may arise.

M&G Investments has been lending to housing associations for 20 years, Davie told PDI. The firm has been lending via private placements since 2010, he added.