Morgan Sindall subsidiary Muse Developments has taken a third share in a new joint venture aimed at delivering 3,000 affordable low-carbon homes with a value of £1bn.
Muse is teaming up with government body Homes England and institutional funder Pension Insurance Corporation (PIC), with the partners injecting £54m of startup capital.
The joint venture, named Habiko, will seek to deliver schemes of up to 100 per cent affordable housing to high green standards.
Phil Mayall, managing director at Muse, said: “The government has set out a bold and ambitious challenge to deliver a significant number of new affordable homes over the next five years. Working together with PIC and Homes England, we can bring together our collective resources and unique experience to deliver thousands of low-carbon and low-energy homes which, by working alongside our local partners, meet the needs of communities across the country.”
James Agar, head of real estate origination at PIC, said the new vehicle would fund development via a mix of grant funding and investment from PIC.
The vehicle would aim to become self-financing, with profit from rental income returned to Habiko to fund further development.
Rents would be set at 20 per cent below market rates.
PIC would retain ownership of the homes, and run them in partnership with a housing association, he said.
The homes will be built across England in areas of high demand for this type of housing, although Agar said it would be difficult for the model to work effectively in London, with its sky-high land values.
Habiko will focus on providing high-quality, well-designed homes that could eventually include Passivhaus methods, Agar said.
“We do not want these to look and feel like affordable housing has done for so long,” Agar said. “We want to try… to really break the stigma around affordable housing and make sure that we are delivering a product that we can all be proud of.”
