London and Berkeley benefit from HCA kickstart

After the Homes and Communities Agency (HCA) ‘kickstart’ program was thrown in to jeopardy in April after the HCA’s budget was slashed, developers have been waiting nervously to see whether their schemes will lose the cash previously promised to them.

Well, yesterday the HCA announced which schemes will still get the cash and the unlucky ones which have fallen by the wayside. 44 schemes out of the 74 original ’kickstart’ schemes which were not under contract before the election purdah period began and where then put in doubt will now receive funding. This translates into over 4,800 new homes under ‘kickstart’ nationwide. In London the figures represent 13 of the 44 schemes and 1,986 new homes.

The full list of schemes which have secured funding can be found here:

The London schemes included are: (click on image to view larger image)

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At first glance it would seem odd that the HCA are funding purely private schemes from developer, Berkeley. However these are to be built as private rented, the first of its kind in the UK. Inside Housing has the full story.

Under the deal, Berkeley Homes will set up a private rental fund that it will use to buy 555 homes it is building over the next two years and then rent them on the open market. The HCA is putting in £45.6 million through its Kickstart scheme and will then in return for the equity funding get a 20% stake in Berkeley’s private rental fund.

Berkeley said the overall investment would allow it to bring forward further phases on 10 of its developments, amounting to 922 homes for private sale, and 299 affordable units, in addition to the 555 for private rent.

The HCA launched its private rented sector initiative in May 2009 with the aim of encouraging institutional investors into the private rented market. This deal with Berkeley, is the first of its kind and could form a model for future agreements.

  

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