The Ministry of Housing, Communities & Local Government (MHCLG) has allocated £30m from the Home Building Fund, which is administered by Homes England, to help start-up modular builder Ilke Homes.
The Home Building Fund offers loans typically of up to five years for development finance, and up to 20 years for infrastructure loans. Interest is payable at what it describes as a transparent, agreed variable rate.
Ilke Homes, incorporated in 2017, is owned by London private equity firm TDR Capital, set up in 2002 by Steve Robertson and Manjit Dale. Executive chairman is former Keepmoat and Engie Regeneration CEO Dave Sheridan.
MHCLG says that the money will “provide the funding to turbo-charge production at their factory in Knaresborough, North Yorkshire”.
The government is also putting the full weight of its publicity machine to help ensure the security of its loan.
The ministry states (as if fact rather than aspiration): “By next year, 2,000 modular homes will roll off Ilke Homes’ production line, rising to 5,000 homes a year within the next five years – making Ilke Homes a top 10 UK housebuilder.”
It continues: “Because Ilke Homes' factory manufactures homes using precision engineering, they are more energy efficient than traditional homes, halving energy costs compared to the average UK property – creating housing that’s good for the planet and good for the pocket.
“A factory environment also allows Ilke Homes to ensure a high-level of quality and consistency is guaranteed for investors, developers and residents.”
The gushing continues: “The result is homes that outperform those built traditionally, with Ilke’s homes proven to be 100% more energy efficient than the average UK home. The investment from government housing agency Homes England will help drive these improvements further by allowing Ilke Homes to scale up its operation.”
Ilke executive chairman Dave Sheridan said: “This deal is testament to the dynamic approach Homes England is taking to address structural issues within our housing and construction industries. The funding will bring in further private capital, creating hundreds more skilled jobs allowing us to build more homes more quickly for first-time buyers.”
Homes England chief executive Nick Walkley said: “Our role is to be bold and take steps to speed up the delivery of homes across the country and there is huge, untapped potential to unleash by creating more capacity in offsite manufacturing. Modern methods of construction offer enormous benefits to housebuilding and this deal will have a transformational effect on ilke Homes’ production.”
Housing minister Esther McVey’s words were rather more measured. “It’s vital we invest in new technology to get Britain building. Homes built using modern methods can be of higher quality, greener and built to last,” she said.