Announcing our new partnership with ReSI Housing, increasing our delivery of shared ownership homes
We are very pleased to start the year with the announcement that, at the end of 2020, we finalised an agreement with Residential Secure Income plc (“ReSI”) (LSE: RESI) on 85 of our homes, allowing us to offer them for sale to the people of Croydon as shared ownership properties.
ReSI invests in affordable affordable housing, and we have exchanged contracts with them for £29 million to acquire up to 85 of our newly completed homes, allowing us to offer them as shared ownership, and continuing the delivery of much-needed affordable homes for the people of Croydon, with the proceeds of the sales being returned to the London Borough of Croydon to be spent on frontline services. The homes are within our schemes Flora Court in Thornton Heath, Auckland Rise in Upper Norwood and Heathfield Gardens in central Croydon.
The deal with ReSI is the first in Brick By Brick’s strategy to partner with registered providers to provide shared ownership housing, allowing us to increase the range of affordable funding options available to purchasers of our homes, and was approved by the refreshed Brick By Brick board at the end of 2020.
Brick By Brick will continue to market the homes, using SOResi as the sales agent, and we plan to launch all the homes for sale in the new year. The ReSI acquisitions will be completed in a staggered manner to align with when purchasers are ready to occupy the properties – we expect this to happen rapidly, as our homes have proved popular so far, and 90% of our available homes for sale are already reserved. The homes will be held by ReSI’s wholly owned registered provider of social housing, ReSI Housing, and are part financed by government grant.
The portfolio consists of one, two and three bedroom apartments across the Borough of Croydon, designed by outstanding architects, including RIBA Stirling Prize-winning Mikhail Riches. All homes offer our high internal specification, with timber parquet flooring, Silestone worktops, Bosch appliances and private balconies. The homes meet or exceed ReSI’s sustainability criteria and include secure cycle storage, solar energy, electric vehicle charging points, and have an energy efficiency Environmental Performance Certificate rating of B or higher.
Shared ownership allows a purchaser to buy a property with a lower deposit requirement and lower annual costs, making the apartments more affordable and allowing local individuals and families to get onto the housing ladder. The homes will follow ReSI’s best practice approach, as set out in its shared ownership customer and environmental charters and will be available starting at 25% shared owner stakes on 250-year shared ownership leases.
Prior to this agreement, ReSI’s recent shared ownership deals include the July 2020 purchase of the final 73 apartments at Clapham Park, London, from Metropolitan Thames Valley Housing, and 39 houses from Step Forward, in Cheshire, Lancashire and Yorkshire, also in July.
Ben Fry, investment manager of ReSI Capital Management and head of housing at Gresham House, said:
“We are delighted to help Brick By Brick increase its delivery of affordable homes, while generating a return for the London Borough of Croydon. These homes exemplify the sort of high-quality assets we seek, delivering value and housing security to first-time homeowners, and meeting the pressing housing needs of London and the rest of the UK. We see this as the start of a long-term partnership with Brick By Brick to facilitate its delivery of much needed affordable homes.
“This investment further diversifies our portfolio and is a key step to reaching full dividend cover by the beginning of October 2021. We look forward to updating shareholders on further progress in 2021.”
Colm Lacey, Chief Executive at Brick By Brick added:
“Brick By Brick’s partnership with ReSI will help us to realise the delivery of high-quality and affordable housing in Croydon and accelerate the returns we provide to our shareholder Croydon Council. ReSI’s approach means we are transacting with a registered provider of social housing that delivers best-in-class shared ownership and provides long-term housing security for Croydon’s residents.”