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L&Q launches PRS product with plans to build 5,000 new London homes

L&Q has launched its private rented sector (PRS) portfolio with plans to invest around £1bn to deliver 5,000 homes over five years across London.

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It follows the completion of the transfer of 800 existing PRS assets into a new subsidiary company and plans for new completions of 1,000 per year.

L&Q said it is using its group facilities to fund PRS, but that it may consider the PRS government guarantee scheme ‘if the terms are attractive’.

Waqar Ahmed, group finance director, said he expects that 60 to 70 per cent of the £1bn funding for PRS will be new money.

He said that the group could look to source direct funding directly into the subsidiary company, but added that no decision has been made.

He added: ‘Whatever we do, we will keep it simple.’

L&Q marked the launch of its plan to build 5,000 homes with the opening of Thurston Point, a major new development offering 238 new rental homes just a few minutes’ walk from Lewisham station and DLR.

Under the government guaranteed PRS scheme, providers will be able to source state-backed debt to refinance existing portfolios.

It was announced in December 2014 that PRS Operations, a wholly owned subsidiary of Venn Partners LLP, had been awarded the licence for the private rented sector equivalent of the Affordable Homes Guarantees Programme.

All loans and bonds would be carried out through a further subsidiary, PRS Finance Plc, which is expected ot launch within the first quarter of 2016.

A number of associations are understood to be looking at sourcing guaranteed funding via Venn.

Applications for the private rented sector debt guarantee must receive approval in principle from government by 31 December 2016.

The licence includes an option for a one-year extension, which was also the case under the AHGP agreement and was taken by its aggregator Affordable Housing Finance (AHF).


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