Essex backs care scheme with £4m for nomination rights
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Photo (cropped): Essex County Council
Essex County Council has paid £4m to help fund a 130-unit care scheme in return for long-term nomination rights.
The grant has been added to £17m from Funding Affordable Homes (FAH), a fund manager established last year by merchant bank Salamanca Group to build the development.
Paul Munday, chief executive of Salamanca Housing Advisors which advises FAH, said that the council grant had been key to making the deal work.
He told Room151: “The developer got a small profit for building the scheme but it wouldn’t have worked without the grant.
“It got them long-term nomination rights – they have secured 118 units of extra care and 12 for learning disabilities for a price much cheaper than if they had built the scheme themselves or bought property on the open market.”
Under the arrangement, FAH will own the building, with housing association One Housing Group signing a long-term management lease.
Munday said: “The council has the peace of mind that the property is being managed by a registered social landlord.
“Our investors benefit due to the CPI-linked rental increases which kick in every year.”
Munday added that he was in discussions with two local authorities over the creation of similar models elsewhere.
He said: “If you are a local authority you can always borrow through the prudential fund but this can work for authorities who don’t want to fund and own the properties themselves.”
FAH is currently applying to set up its own housing association to help deliver affordable housing through section 106 deals with developers.
