Contributors
International law firm Womble Bond Dickinson (WBD) has advised on the creation of a unique partnership which will make available new high-quality housing for Ukrainian refugees while paving the way for future affordable housing schemes in Bristol.
12 flats in the city have been purchased with the aim of providing local, affordable housing for refugees in a manner which has seen private and public investment combined with support from leading social enterprise ACH (Ashley Community & Housing).
The organisation, which provides refugee housing and integration support within Bristol, has chosen place-based impact investor BBRC (Bristol & Bath Regional Capital) as its investment partner on the deal, with additional support from Bristol City Council’s Local Authority Housing Fund.
The purchase, totalling £2.5m in funding and investment, will allow the council to have nomination rights on the flats for a ten-year period, with Ukrainian refugees initially the first priority before opening up to the wider waiting list.
A WBD team led by Managing Associate Christopher Stephens advised BBRC on structuring the deal and the acquisition of eight properties which will be leased to ACH for 10 years with an option to purchase below market value, with Paralegal Olivia Gray and Associate Paralegal Jackie Lushey supporting on conveyancing matters.
Christopher said:
"It has been a great pleasure assisting BBRC and ACH, in conjunction with their lawyers Henriques Griffiths, to help them achieve their vision of delivering high-quality affordable homes for people in acute housing need in a way that combines public and private sector finance and alternative delivery methods.
This deal is particularly notable due to its legal complexity when contrasted with similar agreements in the sector, as well as the need to balance the core aims and goals of all parties involved, and we are pleased to play our part in this socially beneficial project which will provide great benefits to those who will call them home.”
The deal brings together £2.5m funding and investment to enable the purchase, with £1.1m grant funding coming from Bristol City Council’s Local Authority Housing Fund (LAHF) and £1.0m capital financing through BBRC from a private endowment fund impact-aligned investor, who will also see a risk-adjusted return comprising the bulk of the funding.
An additional £0.4m of repayable debt financing from the BBRC-managed City Funds investment fund, which will generate a risk-adjusted return to City Funds investors, has also formed part of the deal.
Fuad Mahamed, chief executive of ACH, said:
“Our vision is to empower refugees and displaced people arriving in the UK to access everything they need to lead self-sufficient and ambitious lives. One of the biggest barriers is affordable accommodation in the right places. Like so many other cities, Bristol is struggling with a huge lack of affordable housing and growing waiting lists. An established home is key to enabling the people we support to secure employment or start up a business to contribute to our economy.
We have over 15 years of providing supported housing and integrated support services to give refugees and migrants the tools they need to be able to integrate into our community and feel valued and valuable. This new partnership gives us a unique opportunity to confidently increase ACH’s housing portfolio and test a new investment model that we hope could be expanded to greater numbers of housing in the future.”
In addition to the eight properties WBD advised on the acquisition of, four additional properties have been directly acquired by ACH, with the overall deal meaning ACH will be able to gradually add to its portfolio, acquiring all 12 properties while managing capital commitments.
During the agreement period, BBRC will be able to manage funding commitments through rental receipts and with option rights available which allow the properties to be transferred to ACH when they are ready to receive them.
Laura Barrow, finance director at BBRC, said:
“This is a truly unique scheme that will tackle one of the biggest issues we face in the UK, using public grant funding to unlock private investment, whilst supporting the sustainable growth of a specialist housing provider, and providing risk-adjusted returns to the investors, who will then in turn feel confident to invest in further schemes.
It’s taken a lot of work to develop and shape the deal, but we are incredibly excited to see it roll out and use it to inform future affordable housing thinking and decision-making.”
All properties meet the Decent Homes Standard and are being let at affordable rent, which represents 80 per cent of market rate including service fees.
