Octopus Capital’s NewArch Homes completes £25m facility with Lloyds

NewArch Homes, the for profit registered provider of affordable homes that is managed by Octopus Capital – a leading UK specialist real estate investor – has agreed a £25 million revolving credit facility with Lloyds.

NewArch Homes operate and manage the properties held within Octopus Capital’s Affordable Housing Strategy. The facility will support the strategy’s continued growth, providing flexible finance to accelerate the acquisition and delivery of new social and affordable homes across the UK.

Since launching in 2023, the Affordable Housing Team has committed long-term capital to deliver more than 1,150 affordable homes across the UK, including zero-bills homes that help residents reduce the cost of living. Through NewArch Homes, the strategy has built one of the UK’s leading for profit registered provider platforms, supporting the delivery of affordable housing at scale.

With more than £525 million of capital raised, the portfolio now includes over 1,800 committed homes across England and Scotland. These homes are located in areas with the most housing need: 99% of homes are in areas of “constrained affordability”, where the house-price-to-median-earnings ratio is above the national average.

The facility also demonstrates the increasing maturity of the sector and the role that for profit registered providers can play in attracting new sources of capital into affordable housing. By combining long-term institutional investment with sustainable bank financing, providers such as NewArch Homes are increasing their capacity to deliver high-quality affordable homes and support housing supply across the UK.

“By bringing a leading UK lender into the sector on terms comparable to traditional housing associations, it demonstrates that for profit registered providers can access the mainstream affordable housing finance market. Combining institutional investment with sustainable bank financing will unlock significantly more capital for affordable housing and accelerate the delivery of high-quality homes across the UK. We hope this transaction marks an important moment for the for profit registered provider sector and encourages others to follow.”

Jack Burnham,  Head of Affordable Housing at Octopus Capital

 “We are delighted to have completed this transaction with Lloyds. Their team has been collaborative and constructive throughout the process, and I would like to thank them for the committed approach they have brought to the transaction. This facility provides an important foundation for the continued growth of NewArch Homes and the Octopus Affordable Housing Strategy and represents another significant milestone in our commitment to increasing the supply of social and affordable housing across the UK.”

Catherine Short, Assistant Fund Manager at Octopus Capital

 “Increasing the supply of affordable homes requires long-term investment supported by flexible finance. This facility will help the Octopus Affordable Housing Strategy continue to grow and deliver more homes across the UK. It also reflects Lloyds Banking Group’s wider ambition to work with partners across the housing market to help address housing need in communities throughout Britain.”

Jess Tomlinson, Managing Director, Global Head of Real Estate and Housing, Lloyds Banking Group