The UK is suffering from a residential housing crisis; in the 30 years leading to 2021, 3 million fewer properties were built compared to the 30 years prior, with the population increasing by more than 9 million [1].
Focussing on the West Midlands region a recent Black Country Urban Capacity report established a considerable deficit of housing within the Black Country has been highlighted and will reach a shortfall of homes over 38,500 by 2038 [2].
Sourcing and securing finance are often listed as one of the biggest challenges faced by smaller, less experienced SME developers. To support matters, the West Midlands Combined Authority (WMCA) Residential Investment Fund (RIF) was launched to support property developers to battle the lack of residential properties across the West Midlands.
Managed by Frontier Development Capital (FDC) the fund is available to residential developers who are seeking capital up to £20m for eligible developments and regeneration schemes. Designed to bring inward investment and employment into the West Midlands region, the RIF has already approved of over £31million.
The WMCA has set out that at least 20% of the homes funded by RIF must be classed as “affordable housing”. The WMCA has re-defined affordable housing in the West Midland as “people will pay no more than 35% of their salary on mortgages or rent”. By linking the definition of affordability to local people’s earnings as opposed to property value, and at least 20% of homes developed from the RIF conforming to this definition, it means that the fund can help make the prospect of homeownership much more attainable for many hard-working individuals and families in the West Midlands [3].
Complex Development Projects
Examples of schemes supported by the fund include Complex Development Projects’ Carver Street- Birmingham and Abbots Lane- Coventry. The developments secured a total of over £5million from the WMCA RIF to create 730 units (including 20% on site affordable housing) and regenerate over 5.5 acres of brownfield land.
Rainier Developments
Another residential development benefiting from the WMCA RIF is Rainier Developments’ Tenby Street-Birmingham scheme, transforming an existing premise within the heart of the Jewellery Quarter. Funding was secured to develop a mixed-use project comprising a family-run jewellery business established in 1824 along with apartments above. The £6.5million investment will create 37 one- and two-bedroom apartments, regenerating 0.33 acres of brownfield land.
The WMCA RIF supports new housing developments within the West Midlands and helps breathe new life into vacant, brownfield land. With expert knowledge, our Investment Directors have collectively over 70 years’ experience working with property developers and can help support developers with their residential schemes.
If you have a scheme you would like to discuss or have any questions about the WMCA RIF get in touch with Nick Oakley, Gerald Gannaway, Ed Bradburn or Kieren Turner-Owen or download our property finance pack for more information.
[1] https://www.bbc.co.uk/news/uk-58747051
[ 2] https://blackcountryplan.dudley.gov.uk/t2/p4/t2p4c/
[3] https://www.wmca.org.uk/news/west-midlands-becomes-first-region-to-re-define-affordable-housing/