Social Rent/Forward Funding

October 6, 2020

Social Rent/Forward Funding

If a developer finds a piece of land which is suitable for a social rent project, a long term institutional investor will (subject to the yield being 6% and the project price exceeding £10 million), purchase the land, enter into a development agreement with the developer and pay for the build out of the project. Therefore, the developer has no capital outlay, no concerns about funding and no concerns about selling the units.

Due to the forward funding nature of this scheme the developer will make a lower profit margin of circa 8% to 12% of project costs. Finally, if the developer has insufficient experience or credibility to assure the financial institution that the project is deliverable, this office can provide a construction company as a joint venture partner to satisfy the concerns of the financial institution.

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