Social Housing Associations have access to a variety of financial streams including the Department of Housing, Planning & Local Government, the Housing Finance Agency, European Investment Bank and the main pillar Lending institutions. There are four key aspects when considering the cost of finance in any social housing development. These determine the cost of the finance available for the development.
1. The source of income or long-term investor returns
The more secure and guaranteed the rental income or contract to purchase the lower the funding costs associated. Lower annual returns will be acceptable to investors if the investment is seen as secure as a government bond for example. So, the certainty of income and rental duration will have an effect on the viability of the overall scheme.
2. Management of the Social Housing Development
Having an agreement in place regarding the operation and management of the development is an extremely important factor in determining financing cost and overall viability. The quality and proven track record of any housing association or estate manager will be a key consideration for any finance provider.
3. Construction Quality
The proven track record and ability of the chosen developer will be an important element in determining both the overall cost of finance and the choice of Approved Housing Associations or Local Authorities willing to manage or purchase your development. This is extremely important as an unproven developer could lead to a large increase in finance cost as it also influences point 2 above. The developers record of completing high quality results in an agreed time frame is imperative in keeping a low finance cost. Here at SOCIAL HOUSING CO. we can help you with this as we have vast experience and a proven track record of completing large scale social housing developments.
4. Development site and its value
A viability study conducted by SOCIAL HOUSING CO. on each social housing development will identify early on if the development is viable and if an Approved Housing Body or Local Authority are likely to be interested. This can be completed before any large investment which saves you both time and money. The viability of any project is also a key factor in determining the cost of finance on the project.