The physical construction of houses on Urban&Civic strategic sites has almost ceased, with only a small minority of housebuilding customers still able to build due to the logistical and supply chain challenges arising from social distancing.
Our staff are largely working remotely but effectively. Conversely, civil infrastructure work, including land remediation and the construction of new roads and schools is continuing due to the greater involvement of heavy machinery and relative openness of the working environments. Safety will remain the paramount consideration.
The maintained investment programme benefits from considerable financial support from Homes England and Central Government. Our deferred land payment model is well suited to accommodating a material short-term drop in output, whilst the minimums provide more than 3x annual sales income security to the Group.
Urban&Civic has a strong balance sheet, with a current total of approximately £143 million of undrawn facilities, the bulk of which are Government backed. Two new loans totalling £95.6 million were completed last week: £60.6m from Homes England for enabling infrastructure at Waterbeach on the outskirts of Cambridge and £35.0 million from the Department of Education to fund a new secondary school at Houlton in Rugby Borough. Interest will become payable only out of realised sales proceeds at Waterbeach and there is no interest on the loan at Houlton. Final repayments are scheduled for end 2030 and mid 2042 respectively.
The Coronavirus crisis is serving to dramatically escalate existing domestic housing trends. Recent published Gov UK data reports that both the number of domestic housing starts and consented applications fell markedly in the last quarter of 2019. The physical challenges of putting planning committees together can be expected to reduce consented applications substantially over the next few months. Urban&Civic's strategic sites are fully serviced and will be amongst the most straightforward nationally on which housebuilders can recommence construction once activity begins to recover, expected currently to be from mid-year onwards.
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