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Winckworth Sherwood advises Genesis on innovative development and funding partnership

Thu 26 May 2016

Law firm Winckworth Sherwood is advising Genesis Housing Association on its role in LINQ Housing, an innovative delivery and financing model developed by LINQ Partners.  Genesis and LINQ Partner have together co-sponsored LINQ Housing’s first initiative, with long-term funding provided by M&G Investments.

LINQ will support housing associations in the development and financing of mixed tenure housing including affordable, shared ownership, market sale and market rent.  Genesis will provide full property management services to LINQ.

LINQ was launched in March 2016 with the purchase of its first long term housing assets from Genesis.  The market rent units are drawn from two multi-tenure schemes in London - 50 flats at Zenith House, Colindale and a further 27 flats in the Mildmay regeneration scheme, Shoreditch.  All are new units which will be held by LINQ for market rental on a long term basis.

By acquiring and holding rental properties on a long term basis, LINQ provides true off balance sheet treatment for the properties acquired – without the need for guarantees from existing corporate entities.

Elizabeth Froude, Executive Director of Finance, Genesis Housing Association said: “I expect this new model to be of great interest to the social housing sector because it offers an efficient long term funding structure that can be used to de-risk development programmes of housing associations or house builders.  This model helps to address many of the financial challenges around delivery faced by housing associations and other developers in terms of valuations, loan covenants and restrictions arising out of their existing funding arrangements.”

LINQ will, going forward, acquire properties from a range of housing associations, local government and developers.   

Louise Leaver, Partner and Head of Housing Finance at Winckworth Sherwood said: “Housing associations and local authorities have great potential to develop and manage properties on a long-term basis, but restrictions and covenants in existing loan portfolios can make it challenging to realise that potential.  This project required great teamwork from all parties involved and is an exciting step in unlocking the sector’s ability to develop and manage properties in a sustainable, responsible and long-term way.”

Winckworth Sherwood advised Genesis on various aspects of the new funding model, including Corporate law (Partner James Duncan), Property law (Partner Andrew Murray) and Finance law (Louise Leaver).

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