Client stories

MORhomes approach to tackle UK’s housing crisis and climate change

MORhomes – a unique borrowing vehicle for housing associations

MORhomes is a unique and innovative borrowing vehicle for the UK social housing sector, with its shares owned by over 60 major not-for-profit UK housing associations. It raises finance on the bond markets and lends it on to its housing association shareholders.

The borrowing vehicle offers a number of benefits to its borrowers, such as immediate access to funds and the flexibility to borrow in amounts from £10 million upwards, saving housing associations the cost of having to borrow larger amounts, which might be more than is needed at any one time.

So far, MORhomes has lent £429 million to over 15 of its housing association shareholders, funding 3,163 new homes in England and Wales for a range of tenures including 1,626 for social and affordable rent, 967 for shared ownership and 57 designed for people with support needs to be more independent.

MORhomes raised the capital through an award-winning Social Bond[1] in 2019, which was based on the International Capital Markets Association’s (ICMA) Social Bond Principles 2018.

MORhomes launches Sustainable Bond Framework and innovative Sustainable Housing Assessment

To be able to issue Sustainability Bonds in addition to Social Bonds, MORhomes sought advice from NatWest’s Sustainable Finance team on the development of its Sustainable Bond Framework. The framework was designed to demonstrate MORhomes’ alignment with ICMA’s ‘Sustainability Bond Guidelines’ and will ensure that future borrowers can evidence both social and environmental impact. Sustainalytics independently reviewed MORhomes’ framework and provided a positive Second Party Opinion.

However, there was one challenge: How can MORhomes  issue a verifiably sustainable bond when the firm doesn’t know in advance who exactly is going to borrow money from the bond proceeds? It was clear for MORhomes CEO Patrick Symington, that housing association borrowers would have to undergo a quality check to ensure their sustainability performance matches the expectations outlined in the framework.

As a result, the company introduced an innovative Sustainable Housing Assessment (SHA) for prospective borrowers of its Sustainable Bond issuances as an integral part of its Sustainable Bond Framework. The SHA examines a housing association’s environmental, social and governance (ESG) performance.  It’s based on an 11-point multiple choice questionnaire, covering a range of indicators including the energy efficiency of existing and new stock, how housing associations are encouraging tenants to conserve more energy, and the installation of low carbon heating systems. Developed in-house and piloted with five housing associations, the assessments will be independently validated by Ritterwald, a pan-European housing and real estate consultancy with a focus on sustainability.

MORhomes’ SHA is aligned with the new Sustainability Reporting Standard (SRS) for Social Housing, a project on which NatWest was the sole bank sponsor. As an early adopter of this standard, MORhomes is encouraging its borrowers and shareholders to follow suit. The SRS provides a voluntary reporting framework for housing providers to report on their ESG performance transparently and consistently. MORhomes plans to tie the sustainability reporting of individual borrowers into its overall Sustainability Bond Impact reporting.

While simple to complete, the SHA provides a meaningful assessment and extends the concept of the SRS by going beyond reporting and delivering an assessment that demonstrates how housing associations are actually performing on sustainability. Scoring well in the SHA will demonstrate that a housing association is going above and beyond current government requirements.

Contributing to social, economic and environmental progress in the UK

Dominic Brindley, NatWest, commented: “We’re delighted to have supported MORhomes with its Sustainable Bond Framework and its innovative Sustainable Housing Assessment, both showing the housing associations sector’s commitment to tackle the UK’s housing crisis as well as climate change. We’re excited that we can actively contribute to social, economic and environmental progress in the UK through by supporting this and many similar initiatives.”

Dr Arthur Krebbers, NatWest, added: “After working together with MORhomes in the workgroup for the Sustainability Reporting Standard (SRS) for Social Housing, we’re thrilled that we could help set up their Sustainability Bonds framework, which underlines yet again the pioneering role the social housing sector plays in the transition to sustainable business practices while also reflecting the growing momentum behind ESG debt in the UK.” 

Gustavo Brianza, NatWest ESG Advisory, reflected: “It is a great pleasure to have supported MORhomes with the development of this innovative framework, which will support the Company in working with its Housing Association borrowers to grow the total volume of financing for green building and affordable housing.”

Patrick Symington, CEO of MORhomes, said: “Tackling the housing crisis and creating lasting change has always been part of our ethos at MORhomes. This new framework and SHA are testament to this. We are proud to have developed a genuinely unique approach to assessing the ESG impact of our current and prospective housing association borrowers which is also quick and simple to complete. Borrowers who meet the standards are going above and beyond current requirements and helping meet the Government’s zero carbon target and the United Nations Sustainable Development Goals. From a sustainability perspective, there is real commitment from housing associations to safeguard the future of the planet and we are urging all our borrowers and shareholders to adopt the Sector Reporting Standards and show us how they are meeting the requirements through the Sustainability Assessment.” He also added: “We very much appreciated having the expertise of NatWest’s Sustainable Finance team in helping us develop our sector-leading Sustainable Bond Framework and guide us through the process of gaining the Second Party Opinion”.


[1] MORhomes wins the Environmental Finance award for the Corporate Social Bond of the year.


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