Heylo Activity Update December 2018

Heylo Housing Group Ltd ("Heylo")

December 2018 update

14th January 2019

Heylo announces that it acquired over 700 properties and raised £80m from a 50 year inflation-linked secured private placement

Following the October 2018 launch of £20m 10 year inflation-linked secured bonds via listed issuer Heylo Housing Secured Bond Plc, Heylo raised a further £80m of funding via a 50 year inflation-linked private placement from BAE Systems Pension Funds in December 2018 via HH No.3 Ltd, another investment subsidiary of the group.

Heylo acquired 713 properties in December from 24 different housebuilders. Of these properties, 88 were acquired by Heylo Housing Secured Bond Plc utilising £13m of the bond funds raised, 292 properties were acquired by HH No.3 Ltd utilising £35m of the £80m private placement and the remaining 333 properties were acquired by HH No.1 Ltd for £62m, Heylo's first investment vehicle that was established in 2014 and which now has over 2,000 properties.

Chris Hewitt, CFO said "we are delighted to have delivered on the business plan, working with our partner housebuilders to make these homes available on a part buy - part rent basis to our customers".

David Cryer, Head of LDI and Private Placements at BAE Systems Pension Funds commented: "Heylo Housing is an established business and they are the driving force of this private sector model of home ownership facilitation. The Heylo business model generates inflation-linked income via the rents paid by the home owners. Inflation-linked income and capital protection forms an important part of our investment strategy".

BondCap Debt Capital Markets acted for Heylo on both transactions.

About the Heylo Group:

The Heylo group was established in 2014 with the dual ambition of providing greater access to affordable home ownership, at the same time as providing inflation-linked returns, secured against residential property, for investors seeking to mitigate inflation risk. Since 2014, Heylo has grown its portfolio to over 2,300 part buy - part rent residential properties worth in excess of £450m and has a further significant pipeline of investment opportunities with national and regional house builders.

Part buy - part rent (also known as shared ownership) is a type of affordable home ownership which allows the purchaser to buy a share in a property, while paying rent on the non-purchased share, with the option to increase their share (known as staircasing). In 2016, in response to the significant level of public demand, the government announced a £4.1 billion grant funding programme, the Shared Ownership and Affordable Homes Programme 2016 to 2021 ("SOAHP") to deliver a further 135,000 such homes over the life of the programme, a four-fold increase in annual delivery.

Heylo employs multiple routes to grow its portfolio, predominantly through its strong relationships with over 50 house builders, acquiring the affordable homes made available as part of the Section 106 planning obligations, and through using funding from SOAHP, via its Registered Provider subsidiary. Heylo also enables customers registered with Help to Buy to purchase existing properties in the second-hand market on a part buy - part rent basis.

Heylo Enquiries: finance@heylohousing.com

BondCap Enquiries: m.dyson@bondcap.co.uk or m.smith@bondcap.co.uk