New homes to be built under new funding deal
We are pleased to announce that we have secured a £14million facility loan from local relationship bank Handelsbanken, part of which will be used to build 95 new homes for private rent in Leicester.
The finance has been secured through our subsidiary company Cygnet, which provides homes for private rent, typically to those who do not qualify for social housing.
Under the deal, Cygnet will borrow part of the funds on the value of a new build site in Leicester as it is constructed rather than on completed properties, enabling the company to maximise its full borrowing potential.
Delivered through a partnership between Midland Heart, Westleigh Partnerships Limited (WPL) and Cygnet, these homes form part of a £58m regeneration project transforming three key strategic sites into housing in the heart of Leicester.
John Drozd, Director of Finance (Treasury) at Midland Heart, says: “The new facility has been approved based on Cygnet’s own assets without further investment from Midland Heart.
“Whilst this is not unusual for the sector, banks will only provide such loans to organisations which have a strong financial performance. The new deal will enable Midland Heart to maintain the financial capacity within its social business so it can invest in new affordable homes, whilst also maximising the full borrowing potential of Cygnet.”
Midland Heart retained its top G1 V1 rating awarded by the industry’s regulator - the Homes and Communities Agency (HCA) - earlier this year and also has an A2 credit rating from Moody’s, one of the strongest in the sector.
Once built, the new homes will increase Cygnet’s market rent portfolio by 80 per cent.
The development in Leicester comprises Sock Island on Abbey Island (formerly Wolsey Textile Factory), St Mary’s Allotment in Aylestone Road and industrial land off Green Lane Road. On completion, the three sites will provide 395 much-needed new homes for private sale, general rent and affordable rent.