Council Looks At Private Investment Trusts For Extra Care Housing

The Carn Thomas site

There have been reports that the Council is in the final stages of a deal to fund an extra care housing project at the former school site at Carn Thomas, through a Real Estate Investment Trust, or REIT.

REITs are a new form of private finance, supplied by large institutional investors such as pension funds, which will be used to fund social housing. These investment trusts also take on the housing stock of local authorities and lease these back to Council-nominated housing associations.

REIT’s are still in the planning stage but are expected to be granted royal assent in September.

However Aisling Hick the Council Officer responsible for developing extra care housing, says the agency involved is being “over enthusiastic” and they’re still in the early stages of discussions.

The article, on the Inside Housing website says the Council is in ‘due diligence’ with an investment trust called SAF Housing Solutions and this was confirmed in a tweet from SAF’s founder, Phil Shanks, over the weekend.

Due diligence is a formal stage of a deal when detailed information is shared between the two parties involved to help them decide whether to move forward.

Aisling says the Council has had only initial conversations with Mr Shanks and is assessing the scheme alongside many others for providing extra care housing on the Islands.

But when we spoke to Mr Shanks, he stood by his comments saying, “if they want to call it something else, they can.”

However, both he and Aisling stressed the discussions only relate to providing extra care housing and did not include the Council’s existing housing stock.

“Just Another Card In The Pack”

Aisling says there may be advantages in using the new REIT’s to fund a scheme, such as lower repayment costs for loans, but they need to take a careful look at the benefits and risks compared to borrowing money from the Public Loan Board, working with housing associations such as Cornwall Rural or private groups like Methodist Homes.

There’s also the possibility of selling the site to a private developer and using the money for new housing projects.

She says REITs are “just another card in the pack.”

Aisling says Scilly is in a complex situation as building projects cost more here than on the mainland, which makes them less cost effective for housing associations.

Private developers would also need to build large numbers of housing units to get a sufficient return on their investment.

Aisling says they’re not looking to build “a bigger Park House.” She says that extra care housing in the future will be about providing living units “with their own front door” but with round-the-clock care if required.

She says that will also require new ways of working with health providers such as the NHS.

And she says that care could even be provided in people’s own homes, especially in a small community such as Scilly although with the poor quality of some housing stock here, some new build accommodation would be an advantage.

Chair of the Council’s Community Services Committee, Richard McCarthy, told us, “In the current economic climate delivering a scheme for extra care housing on Scilly is not going to be as straightforward as we hoped.

“However, we are exploring options such as Community Land Trusts and seeking partners like Housing Associations to try and secure the maximum possible benefits for the islands from the Carn Thomas site.”

He added that the Library and the Register office will stay at Carn Thomas for the rest of this year while Porthcressa is being redeveloped.