Nationwide selects HA for £50m scheme under social investment initiative

News23 Apr 2020Luke Cross

Nationwide has selected GreenSquare Group as its affordable housing provider on a 239-home scheme that the building society is delivering under its social investment programme.

A CGI of the Oakfield development

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Nationwide selects GreenSquare as affordable housing provider on 239-home scheme that the building society is delivering under its social investment programme #ukhousing

Nationwide has planning permission from Swindon Borough Council for the development consisting of homes for sale or rent, in Oakfield, Swindon.

The building society is a long-standing lender to the social housing sector, but with a loanbook that has fallen by a third in five years to £5.7bn, according to half-year results for 2019/20.

However, Nationwide is funding the Swindon scheme’s build cost itself under its social investment programme.

Nationwide said it is not looking to make a profit from the development, so any surplus will be reinvested in other community projects.

Igloo Regeneration is leading the scheme as development manager. Mi-space has been appointed as main contractor, with work on site under way and the first phase of homes available from Autumn 2021.

The plan is for 71 properties – representing 30 per cent of the homes – to be affordable. These will include one, two and three-bedroom apartments and houses, which will be available for a mixture of rent and shared ownership.

GreenSquare signed the contracts this week (April 2020) to purchase the affordable housing.

Tony Alexander, commercial lending director at Nationwide, said: “It has perhaps never been as important as it is today to invest in society and our communities; so we’re really pleased to be working with GreenSquare on the provision of affordable homes at Oakfield.

“We look forward to progressing on the project, readying the homes for autumn 2021.”

As well as new homes, Oakfield will include green space, a new public park with a children’s play area, a community meeting space and links to nearby amenities.

Nationwide as a sector lender

As a sector lender, Nationwide’s loan book has fallen by around a third over five years, to £5.7bn.

Lending to registered social landlords (RSLs) had increased from £6.3bn in 2008 to more than £8bn by 2015, through both organic growth and mergers with Derbyshire, Cheshire and Dunfermline building societies.

In 2016, it reaffirmed its commitment to the social housing sector amid an announcement that it is closing its commercial real estate division. The project finance and commercial real estate portfolios are closed to new business.

However, the latest interim report by the building society, for the period to September 2019, said that lending was only reopened to RSLs in September 2018.

It also said that reductions in the RSL portfolio are due to “amortisation, early repayments and a managed reduction in the concentration risk to loans above £200m”.

It added: “Continuing the deleveraging activity in previous financial years, the overall portfolio is increasingly weighted towards registered social landlords, with balances of £5.7bn (4 April 2019: £6bn), and project finance with balances of £0.8bn (4 April 2019: £0.8bn).

“With a smaller book, and fewer active borrowers requiring further lending, our commercial real estate balances decreased during the period to £1.2bn (4 April 2019: £1.4bn).”