Croydon Council’s development company Brick by Brick has exchanged contracts to sell 85 shared-ownership homes to Residential Secure Income for £29m.
The council recently declared itself effectively bankrupt and is currently facing a £66m hole in its finances. It has a large exposure to property investment, where it has seen income hit in the wake of Covid-19.
Brick by Brick’s sale will be staggered, with ownership transferred to ReSI when the purchasers are ready to occupy the properties. It said this is expected to happen rapidly, with 90% of the homes reserved.
The homes will be held by ReSI’s registered provider, ReSI Housing and are part financed by government grants. The acquisition will be funded by ReSI’s £300m, 45-year debt facility. It brings its total shared-ownership portfolio to 281 homes.
Colm Lacey, chief executive at Brick by Brick, said: “Brick By Brick’s partnership with ReSI will help us to realise the delivery of high-quality and affordable housing in Croydon and accelerate the returns we provide to our shareholder Croydon Council.”
Ben Fry, investment manager at ReSI Capital Management and head of housing at Gresham House, added: “We see this as the start of a long-term partnership with Brick by Brick to facilitate its delivery of much-needed affordable homes.”
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