Mencap’s housing arm will raise £30 million to house 250 people with learning disabilities through the UK’s largest ever charity bond. The charity will launch the bond through its Golden Lane Housing subsidiary, which currently provides accommodation for more than 1,000 people in England and Wales. GLH plans to raise an initial £10 million before the end of April, with a further £20 million targeted in the next financial year.
Alastair Graham, director of GLH, said that the bond would replace previous funding streams such as public sector grants and private bank lending. “The bond is a new way of raising capital as there is very little grant available from local authorities and PCTs,” he said. Mr Graham added that the bond ‘works better than traditional finance’ as it did not require GLH to put up housing assets as security.
Sustainable bank Triodos is advising on the bond. Investors, which are expected to include charitable funds, will receive a return of 4%.
Bonds can be bought for a minimum of £2,000 which Mr Graham hopes will attract retail investors. He also said he would encourage investors in its 2003 £1.8 million bond, which matures this year, to reinvest. GLH has already identified 30 homes that it will buy in 30 different local authority areas using the first tranche of cash. These homes will be adapted for use by disabled residents.
Source: Inside Housing
15th February 2013