Ipswich-based landlord obtains £32.5m RCF from NatWest

Orwell said it will use the funding to meet its ambition of delivering 100 new homes every year. The landlord will also use the funding to invest in the management of its homes as well as improving their environmental performance.

According to its most recently published accounts covering 2022-23, Orwell delivered 104 homes during the year.

NatWest has been a funder to Orwell for more than six decades throughout the housing association’s entire history since it was formed in 1963.

David Hall, director of finance at Orwell Housing Association, said: “We are delighted to agree this funding with NatWest and to continue our long-standing relationship with the bank.

“The offer met our needs perfectly and the teams worked well to ensure it is available to support our continued development. We have strong roots in our communities and this funding will enable us to grow further.”

Mr Hall told Social Housing that as well as obtaining the new RCF, the landlord renegotiated and improved its covenants on an existing term loan it has in place with NatWest.

“One of the key benefits to this was the ability to renegotiate the existing covenant structure in place across the full loan structure and move the interest cover covenants fully from an EBITDA MRI basis to an EBITDA-only basis,” he said. 

“The covenant flexibility/change enables us to accommodate more improvement spend [on existing stock], along with the actual funding itself for the investment plans.”

This is NatWest’s first deal in the sector since the bank announced its aims to lend £7.5bn to UK housing associations by the end of the 2026 calendar year. This was a rise from its previously announced £5bn ambition.

Since announcing the original £5bn lending ambition, NatWest has agreed deals with several landlords: WDH, Eildon Housing Association, Thirteen Group, Golden Lane Housing, Stonewater and Incommunities. 

Other deals have included Together Housing, Bromford, Karbon Homes, Torus, Islington and Shoreditch Housing Association, Believe Housing, Westward Housing Group and Maryhill Housing Association.
 

Dharmesh Patel, associate director, housing finance, real estate finance at NatWest, said: “For more than six decades we have developed a strong partnership with Orwell Housing Association to supports its growth goals.

“As one of the UK’s largest lenders to the housing sector, we recognise the important role Orwell Housing Association plays in shaping our communities and we will continue to work with the management team to help them deliver on their commitment to providing quality housing in the communities of the East of England.”

In November, Orwell’s regulatory grades of G1/V2 were retained by the Regulator of Social Housing.