Wh Where re d do o we g get t th the m mon oney y fr from om? Chai air: r: An Anna a Shiel, Big S Society ty Cap apita tal
Triodos Bank Nv National CLT Conference 28 th January 2016 Mark Ogden Relationship Manager & Dan Hird Head of Corporate Finance.
Debt funding 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.
Pre development and development funding Grants and Risk Finance 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
We’d like to talk to you 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.
Jo Jon Le Lee - Ecol olog ogy y Bu Buildi ding S Soc ociety ty
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 CO 2 Emissions EPC ‘B’ 1 0.5 EPC ‘A’ 2 0.75 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 4kg/m2pa Passivhaus and EnerPHit
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 ovic – CAF F Ventu ture resom ome
CAF Venturesome / CLT Social Investment Fund • CAF Venturesome: Supported 470 organisations with £38 million • CLT Social Investment Fund: Repayable finance since 2008 CLT Fund I + CLT Fund II National CLT Network Start-up Fund Pre-development Development 36 loans 12 loans Feasibility and technical £1m £2.8m assistance grants up to £5.5k (Avg. size £30k) (Avg. size £230k) help scope a project (feasibility) and funding the project funding the costs of fund initial costs (technical assistance) prior to planning construction permission www.cafonline.org/venturesome
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
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