Just three years after launching as a company, modular housing pioneer ilke Homes has grown its order book to over £200 million, in a sign that modular housing is becoming increasingly popular among investors.
The milestone, which puts ilke Homes on par with some of the UK's biggest housebuilders, has been reached following today's announcement that the Yorkshire-based company has agreed a £44 million deal with ReSI LP's for-profit Registered Provider, ReSI Homes Limited.
All the homes being delivered will be made available for shared ownership. This is important, as revised price caps for the Government's Help to Buy equity scheme, which came into force in April 2021, mean first-time buyers in Essex can only access the loan if their new-build homes cost less than £437,600. The threshold was previously set at £600,000, meaning many families may be locked out of owning a home big enough for their needs.
The new development, accessed off Victoria Road in Stanford-le-Hope, is being delivered as part of ilke Homes' 'turnkey' package deal - whereby customers can purchase complete developments sourced and delivered by the company. This involves ilke Homes securing land, gaining planning permission, manufacturing the homes and developing the sites.
The announcement comes after a number of high-profile deals agreed by ilke Homes in the last two years, including a £31m deal with hedge fund giant Man Group and a £100 million deal with housing association Places for People.
Dave Sheridan, executive chairman of ilke Homes, said: "Factory-built housing is a unique proposition for investors in that it can future-proof investments against government policy, help meet strict ESG criteria thanks to its green credentials, and allow for revenue streams to be accessed as quick as possible due to a significant reductions in construction programmes."
Offsite manufacturing, where homes are created along production lines, has been recognised as a solution to the affordable housing crisis by the Government and is popular among investors because:
- Speed: Construction programmes can be cut in half, meaning investors benefit from additional rent-roll and the delivery of affordable housing is sped up
- Sustainability: Homes manufactured along a production line are more airtight, meaning less energy is required to heat or cool homes. This translates into lower energy bills for residents and reduced long-term operational costs for investors
- Quality: ilke Homes is able to minimise defects thanks to the company's ability to run stringent quality checks at numerous points of the manufacturing stage, meeting investors' requirements for a best-in-class product
Savills predicts that by 2030, the proportion of homes being delivered using offsite manufacturing will double to 20 percent. According to the estate agency, the three main drivers are: the cost and availability of labour, housing supply shortages and regulatory or governmental intervention.
Tom Heathcote, executive director of development, said:
"We're looking forward to commencing on site towards the end of August and delivering what will be ilke Homes' first development led package deal in the South East. This scheme will provide a selection of 2-4 bedroom affordable homes in Essex set within generously proportioned and attractively landscaped open space. We are excited to partner with ReSI LP and deliver them our exemplar homes, this transaction being a testament to ilke's commitment to scaling-up its offering to the market.
"With house prices rising at an exponential rate and affordability levels hitting record lows, scaling-up the delivery of affordable housing has never been more important. Thanks to our accredited offsite method of delivery, ilke Homes' teams will be able to stick to a strict construction programme and ensure these homes are delivered as quickly as possible."
Alistair Wardell, Investment Director at Gresham House, said:
"The deal with ilke Homes provides an innovative and much-needed solution to the historic undersupply of shared ownership housing in the South East of England. ReSI LP is committed to helping alleviate the affordable housing shortage in the UK and delivering sustainable and innovative solutions to this problem. This project will deliver real-world benefits to residents in Stanford-le-Hope early next year and we look forward to working with ilke Homes throughout the process to maximise the potential of the development."