2. “R3 is all about sustainable investment
and delivery of shared ownership housing
to provide homes for more people”
3. Welcome to heylo
heylo is a leading residential property company specialising in the creation and operation of full service solutions to
deliver new affordable housing across the UK. We work to bring institutional investors and housing associations together
to release capital from existing stock to drive new housing supply.
About heylo
heylo is a local authority joint venture company focussed on providing affordable housing across the country. Using
long term pension fund investment and a full range of housing delivery solutions, heylo works in partnership with house
builders, local authorities and housing associations to increase the supply of new affordable housing.
heylo maintains market leading standards of customer care via long term contracts for day to day customer and
property management with housing association partners.
heylo’s solutions for housing associations are centered on two areas:
• ‘R3’ - Release, Retain, Recycle: Release capital via stock transfer. Retain
customer management. Recycle embedded value to deliver more homes
• ‘Let’s Share’ - brings the affordability benefits of shared ownership to local
authorities and housing associations looking to use shared ownership to
deliver rented affordable housing
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4. heylo has developed a stock transfer solution for shared ownership properties that releases embedded value from
existing stock at circa 20 times current passing rents (which must be RPI linked) up to a maximum of 80% of OMV.
Management of the properties and customers can be retained and the receipt can be recycled into new homes.
Release capital from existing shared ownership properties
with RPI linked rents
R3 – RELEASE, RETAIN, RECYCLE
1.
2.
3.
Overview
Retain the property managemernt and all important customer
relationship
Recycle capital receipts to deliver new shared ownership
without the need for increased borrowing
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5. R3 – Shared Ownership Solution
The current business environment in which housing associations operate is more challenging that ever. R3 is a simple and
viable option for housing associations to release capital from shared ownership properties (especially those which were
expected to be sold via staircasing at some point).
Releasing value via stock transfer
The transfer of stock to heylo releases
significant capital and facilitates
recyling and delivery of new affordable
housing.
A capital release from the transfer of
aged shared ownership properties,
which also usually releases grant, should
have a positive impact on housing
association finances and viability.
Maximising value
R3 maximises the value of existing shared ownership stock - delivering
significantly more capital than the sector lenders will advance.
heylo delivers a cash amount at the point of transfer of the landlord’s
interest in existing shared ownership properties - this normally includes
payment for any embedded grant liability which remains with the
housing association unless otherwise negotiated and agreed.
Management retained
Whilst the properties are transferred to heylo, the housing association
can elect to retain the property management and the all important
customer relationship via a standard form management contract in
place for the length of the longest lease.
“retain the property
management and the
all important customer
relationship”
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6.
7. R3 – Capital Release and Recycling Process
Using existing assets to fund new supply makes great use of embedded value which may otherwise take many years
to be released through natural staircasing by the leaseholder. Where new affordable housing can be delivered for less
than 75% of open market value, this capital release is sufficient to fully fund new delivery. Higher costs of new delivery
may require debt funding, but given the recycling approach of R3, this funding need only be short term.
Management of leaseholders can be retained by the organisation for all properties in the model and the cost of
management is recovered through lease and service charge arrangements. Once the first transaction is completed, the
capital released can be used to fund a new shared ownership property on a 1 for 1 basis, and the cycle begins again.
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Transfer of Stock
Management
retained
Proceeds from
Transfer
Build/ Buy New
Affordable
Homes
Shared Ownership
Stock
Initial Share sold to
new customer
Home Owners
Created
Properties Under
Management
Sustainable
Delivery
Strategy
