Wh Where re d do o we g get t th the m mon oney y fr from - - PowerPoint PPT Presentation

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Chai air: r: An Anna a Shiel, Big S Society ty Cap apita tal

Triodos Bank Nv

National CLT Conference 28th January 2016 Mark Ogden Relationship Manager & Dan Hird Head of Corporate Finance.

We are looking to find projects to fund –

• 1. Lend to fund development then lead onto

long term loan linked to rental income. Maximum £15M per entity.

• 2. Maximum 70% land value 70% build costs.

Maximum 70% loan to value long term. (Open market value)

• 3. Recognize long term loan and rental income

levels mismatch in early stages. We offer a split loan facility to reduce payment levels.

Debt funding

Pre development stage

• CLT Start Up Fund (advice & small grant scheme run by National CLT Network)
• Grants (Local Authorities, Power to Change, Community Buildings programme, Urban CLT

Project)

• Equity – community share issue?
• Pre-development loans (CLT Social Investment Fund)

Post planning (i.e. development funding) If a bank will do (say) 70% loan to value, where does the 30% come from?

• CLT Social Investment Fund (CAF Venturesome - up to £350,000)
• Affordable Homes Rental Fund (Resonance)
• Government and Local Authority grants and loans
• Community share or bond issue
• Other social investors (charitable foundations and social investment funds)
• Innovative structuring – sale of units, shared ownership etc

Pre development and development funding Grants and Risk Finance

Mark Ogden Relationship Manager. Food, Farming and Trade Team 07789 986579 Mark.ogden@triodos.co.uk Dan Hird Head of Corporate Finance 0117 980 9588 Dan.hird@triodos.co.uk www.triodos.co.uk Triodos Bank NV Deanery Road Bristol BS1 5AS Triodos Bank NV, incorporated under the laws of the Netherlands with limited liability registered in England and Wales BR3012. Authorised by the Dutch Central Bank (DNB) and regulated by the Financial Services Authority (FSA) for the conduct of UK business.

We’d like to talk to you

Jo Jon Le Lee - Ecol

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Where do we get the money from?

• Who are we?
• Lending for Community Land Trusts at EBS
• What does the future hold for investing in

CLTs and how can we support the sector? Jon Lee, Business Development Manager

EBS - Who we are

• Established 1981 – most recent building society created
• Initial focus – low-impact living
• Assets: £138 million
• Mortgage book value: £100 million+
• Mutual – owned by the 9,500 members of the Society
• Specialists - only building society that lends exclusively for

environmental and community projects

Community Land Trust lending

• Development finance for groups available (up to £1.5m

and a maximum LTV of 80% at any phase)

• Stage payments available benchmarked against the

increasing value of the plot / site

• Discounts for ecological and energy efficient homes on

completion for longer term mortgages supported by rental income

• “Affinity” residential mortgages available to buyers,

including shared ownership (up to 95% of share) and restrictive price covenants (up to 90% of restricted sale value)

• Development finance for groups available

C-Change Mortgage discounts

Level Discount % Standards CO2 Emissions

1 0.5 EPC ‘B’ 2 0.75 EPC ‘A’ AECB Silver (Carbonlite step 1) CSH Code Level 4 22kg/m2pa 3 1.00 CSH Code Level 5 4 1.25 AECB Gold (Carbonlite step 3) CSH Code Level 6 Passivhaus and EnerPHit 4kg/m2pa

What does the future hold?

• Housing policy a potential threat to CLTs
• Affordable Housing need increasing all the time - sustainable

communities (rural and urban)

• Lender appetite for the “unusual” is frustratingly low
• Working with partners in the finance sector will be key on larger

projects

• Created a bespoke package for CLTs to demonstrate credibility and

support the Network

• Working with the Network to encourage other lenders (BSA

members)

• Lobbying government on empty homes and CLT exemptions on right

to buy etc.

• Case studies and successes need shouting about

Pete ter r Ke Kelly - Chari rity ty Bank

San andr dra a Ha Halilov

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CAF F Ventu ture resom

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CAF Venturesome / CLT Social Investment Fund

• CAF Venturesome: Supported 470 organisations with £38 million
• CLT Social Investment Fund: Repayable finance since 2008

www.cafonline.org/venturesome

help scope a project (feasibility) and fund initial costs (technical assistance) funding the project prior to planning permission funding the costs of construction

12 loans £2.8m (Avg. size £230k) 36 loans £1m (Avg. size £30k)

Feasibility and technical assistance grants up to £5.5k National CLT Network Start-up Fund Pre-development Development CLT Fund I + CLT Fund II

CLT Fund I Closing – Key Learnings

From our experience managing the first fund providing repayable finance to CLTs…

• Development facilities repaid in full (default rate = 0%)
• Could be taken on by existing lenders or new ones
• More time needed to assess risk for pre-development facilities
• We are still managing several cases that have experienced delays
• Higher risk so we think a future fund will need a form of subsidy
• Key challenges include sourcing land, raising funding, and unanticipated issues

with the site (e.g. protected species, site access, difficult S106 negotiations, etc.)

• High need for pre-development finance
• Learnings from the first CLT Fund will be published in March
• We continue to refine learnings through the second CLT Social Investment Fund

www.cafonline.org/venturesome