Traditional funding routes have changed and pressure on development continues. In this article, I examine the opportunity afforded by pension fund schemes – and look at the Green Deal introduced by the Energy Act 2011 with the intention of creating a new financing framework to enable the provision of fixed improvements to the energy efficiency of households.

Pension funds, of course, have the potential to invest in RPs – but have largely remained out of the social housing sector even though RPs are a relatively good risk despite their reliance on property assets and the potential fluctuations in income sources.

Representatives of large pension funds are being asked to give evidence to MPs in a bid to find out what is preventing them investing in social housing on a large scale.  Whilst historically pension funds have not shown much interest, the increased activity in the sector by institutional investors and fund managers means that pension funds should and could re-think their approach.

We have recently seen an RP raising £45m with one pension fund in order to purchase over 800 properties. The appetite might now continue if evidence of interest by investment managers such as M&G set a precedent – M&G is now raising money for a £1 billion social housing fund, with two unnamed pension funds reportedly mulling investments totalling £100 million. With over £60 billion of outstanding debt that needs refinancing, while the banks want to re-price their debt and won’t lend long term, RPs may find pension funds more attractive.

We will also see government-led sources of finance such as the renewable heat incentive and Green Deal being kick started – indeed, one innovative RP recently spoke at length at a Croftons’ Discussion Forum and commented on how RPs may make the Green Deal work, such as using existing funding mechanisms and supplier obligations;  adding in solar PV and increasing the return on investment; using investment plan spend to ‘go early’ on the Green Deal; partnering with utility companies and looking at sustainability for large scale programmes.   As well as improving the energy efficiency of housing stock, use of government initiatives could also give Registered Providers another income stream.

We will soon be producing a Guide to the Green Deal for Registered Providers, available by email.

Richard Clarke, Partner

Now in its third year, Croftons’ annual Go-Karting event was very well received by all who attended, including those that just came to watch.

The racing took place over a series of 12 heats, followed by two semi-finals and a grand final – which was made up of representatives from Croftons’ clients and employees of the firm itself.

In the end, Richard Ingram took gold, as well as clocking the fastest lap time of the day. Lee Robinson snatched second and Adam Scott completing the podium by taking third place.

Thank you to all who took part!

Here are a few more photos from the evening…

We are delighted to announce that we have been awarded Conveyancing Quality Scheme (CQS) Accreditation by the Law Society; the quality mark for residential property lawyers.

The firm’s property department underwent rigorous assessment by the Law Society to secure CQS status. The scheme improves efficiency with standards and service levels and allows consumers to recognise law practices that provide a quality residential conveyancing service.

This is a proud moment for the property team and the firm as a whole. It is recognition of the high levels of service our team provides and, of our commitment to ensure that the highest standards of training and customer care are met.

With so many residential conveyancing providers in the United Kingdom, it is worth noting that not all practices meet the Law Society’s required standards. Therefore, we would recommend that, if you are buying or selling a property, you check that your chosen legal practice is CQS accredited.

Lisa Raynes

For more information read the full Press Release

Lucy Worrall, Partner

The scheme, which is officially launched in October, revolves around the Golden Rule; that savings made from the improvements should always be more than the cost of the improvements.

Ministers had hoped that some large retail stores would back the Green Deal, investors like Tesco and Marks & Spencer are absent from the initial list – as are three of the ‘Big Six’ energy providers. Gentoo Group is however the first registered provider to sign up.

The full list of organisations who have committed to the Green Deal are: Ampere GDP, Anglian Home Improvements, BritishEco, British Gas, CarbonLow Group, Carillion, Empower Community, Enact, E.On, Gentoo Group, Grafton Group, Insta Group, Keepmoat, Kingfisher, Mark Group, ReEnergise Finance, SIG plc, SSE, Stroma, Toriga Energy, Wilmott Dixon Energy Services, Yorkshire Energy Services.

This is the fifth successive year that Excel Publishing’s Northern, Midlands and Southern Housing, along with sister-title Builder & Engineer, have got together to celebrate the achievements of women making their mark in a traditionally man’s world.

You can now see a video of the highlights of the evening on the awards website and if you scroll down, an interview with Lucy herself.

Simon Leighton, Managing Partner

The scheme was initially introduced in the 1980s and capped discounts at £25,000. The Government’s newest Right to Buy model offers discounts of up to £75,000 – this is four times the current available discount in London and treble the discount for residents in the rest of the country.

The scheme however, has come under immense criticism due to the existing shortage in affordable council housing. The government has said that any homes sold under the scheme will be replaced with new homes for affordable rent but critics say the proposed financial model is unworkable. The model is structured so that Councils can keep the monies made from homes bought under the Right to Buy sale and to make up 30% of the cost of new homes with the receipts from right to buy sales. The remainder will be provided by independent investors or council assets.  If, however, councils are not able to use the money locally it will be placed in a central pot to support affordable house building nationally and redistributed by the HCA.

Many commenters are unconvinced that this is a workable financial model. With some pointing out that with a shortage of council houses already, selling more would be an ‘unmitigated disaster.’

Further, the National Housing Federation has called for a timescale to be set by which time the money has to be spent on building a replacement home.

“This is a highly significant change on the localism agenda,” continues Lucy.   “Local authorities which own housing stock will gain full control of their housing income and expenditure and be more autonomous in their decision-making.  171 authorities currently own housing stock – with a combined debt of £28billion.”

From April 2012, local authorities can keep rental income from their properties in return for taking on more debt under reform of the housing revenue account.  “We expect that local authorities will be much more active in managing their stock and be innovative in how they do so – for example in looking to the private sector to ‘partner’ on maintenance contracts, considering stock transfers to release borrowing capacity under the HRA debt cap for further developments, and working with other councils and registered providers.”

For further information on the Housing Revenue Account (HRA) subsidy system and the changes  coming into effect in April 2012, visit: www.hraselffinancing.org.uk

Lucy Worrall, Partner

Twitter @lucyVworrall

Email lworrall@croftons.co.uk

The Supreme Court last week rejected the Department of Energy and Climate Change’s appeal over premature cuts to the feed-in-tariff scheme for solar PV.

On Monday 26 March, a panel of Supreme Justices refused the Government permission to appeal an earlier High Court ruling – this means that any PV systems installed between 12 December and 3 March will receive the higher FiT rate of 43.3p per KwH for 25 years. The DECC has also been ordered to pay the costs of the other parties, which include major solar panel companies and charity Friends of the Earth.

The DECC could theoretically appeal to the European Court but last week Alasdair Grainger, from the DECC’s feed-in-tariff team confirmed that they would not be considering this option if the Supreme Court case was lost.

An official statement on Monday explained that “Permission to appeal was refused because the application does not raise an arguable point of law of general public importance which ought to be considered by the Supreme Court at this time”.

Lucy Worrall, social housing lawyer and Partner at Croftons has commented “those RPs that were brave enough to be pioneers in their sector and install panels on a large scale before March this year will now reap the benefits – in terms of their investment and of course for their tenants. There are still schemes available now that can stack up for RPs financially, but with further cuts due in the FiT in July and October any RPs wanting to take advantage will have to move quickly.”

Lucy Worrall, Partner

Twitter @lucyVworrall

Email lworrall@croftons.co.uk

Lucy has had a stellar and groundbreaking year over the past 12 months. She has cemented her reputation as an expert in her field in development and regeneration and enabling social housing projects to go ahead and optimising the use of solar pv panel technologies and other ‘green’ energy schemes – often in ‘unchartered waters’ where she has created the legal solutions, not merely followed precedents (which have not existed).  In the social housing sector, in particular, there are a myriad of legal complexities and, in many cases, no precedent so Lucy has pioneered the creation of legal solutions in genuinely uncharted territory. Lucy was involved and instrumental in obtaining lender’s consent for a social landlord’s solar pv panel rent a roof scheme – less than a handful of such schemes managed to achieve this nationally.

Congratulating Lucy on her award, Croftons Managing Partner Simon Leighton said:  “We are proud and delighted that Lucy’s work has been held up as an example to other women and to the legal profession.    Her clients range from relatively small social housing providers to some of the UK’s largest such landlords – all of whom are focused on providing affordable housing and often to the country’s most needy and vulnerable citizens.”

Simon continued:  “Lucy has been spearheading our business development and growth drive at a time when the legal profession itself is facing unprecedented challenge – caused in no small way by the economic climate and the far-reaching regulatory changes which all law firms must tackle head on.   Lucy has helped tackle this head on and, at the same time, has been working with Registered Providers who themselves are facing unprecedented challenges.  Funding cuts and the ever increasing need for Registered Providers to meet housing demands have all brought challenges not just for clients but for law firms advising them. “

Commenting on the Awards and Lucy’s nomination, editor of Housing (magazine) Michelle McKenna said:  “The Women in Construction Awards is now in its sixth year and the event has grown from strength to strength. The initial event was very much led by social housing organisations but as it has grown its reach has expanded to the wider construction sector and Lawyer of the Year was a new category for 2012, introduced to reflect that growth. We were very impressed with the calibre of entries and Lucy was a worthy winner. Her pro-active stance and willingness to go above and beyond made her stand out to the judges”