Singapore-based global asset manager ARA Asset Management Limited (ARA) said on Sunday that its subsidiary, ARA Venn, an investment manager in European real estate private debt, has been appointed the manager of a new £3 billion Affordable Housing Guarantee Scheme (AHGS) by the UK Ministry of Housing, Communities and Local Government (MHCLG).
Housing Minister Christopher Pincher MP unveiled the concession agreement with ARA Venn that will provide £3 billion of cost-effective long-term loans, of up to 30 years, to registered providers developing new affordable homes.
ARA said the scheme is expected to support the delivery of around 17,000 critical homes for lower income families and alleviate the issue of housing affordability in the UK, especially amidst the economic uncertainty.
ARA Venn will be responsible for establishing and managing the scheme, including the origination, underwriting and ongoing management of the loans, and developing and managing a Government guaranteed bond programme to efficiently fund them. Whilst initially set for £3 billion, there is an option to increase the scheme up to £6 billion.
Housing Minister Christopher Pincher MP said: ”Ensuring everyone has the opportunity to access a secure, affordable home is central to the mission of this Government and our £3 billion Affordable Homes Guarantee scheme will play a vital part in achieving this.”
”ARA Venn’s wealth of investment expertise will prove invaluable to delivering another 17,000 muchneeded new affordable homes to families across the country,” he added.
Mark Ebbinghaus, CEO of ARA Europe and Chairman of ARA Venn, said: “We are honoured to be appointed as the manager of the new Affordable Housing Guarantee Scheme in the UK. ARA Venn will leverage its expertise as a specialist manager of European real estate private debt to support the UK Government’s crucial role in the housing markets, and do our part to create more affordable housing in the UK. We are very proud to continue our long-standing relationship with the UK Government.”
Richard Green, Partner, Portfolio Manager of the Scheme at ARA Venn commented: “ The scheme will offer registered providers very attractively priced long-term loans to support the vital housing that they provide. We look forward to establishing the scheme as a key partner to support the vision and ambition of the social housing industry. The ARA Group has a strong commitment to ESG, firmly believing in long term responsible investment and delivering a positive social impact from this scheme is a reflection of that.”
Paul House, Managing Partner at ARA Venn commented: “This exciting and timely new scheme will form an integral part of our extensive residential lending activities within Europe, a core strength within our business where we provide both commercial lending and residential mortgages and which encompasses all sectors – social housing, market rent and owner-occupied.”
Currently, ARA Venn also manages the £3.5 billion Private Rented Sector Guarantee Scheme (PRS), a similar lending scheme focused on the private rented sector, on behalf of MHCLG.