A NORTH Yorkshire-based pioneer of modular housing has raised £60 million to scale up its operations.

ilke Homes in Knaresborough will use the funds from its latest fundraising round to deliver more than 10,000 sustainable, factory-built homes over the next five years.

Government agency Homes England has provided half of the £60 million, with the other £30 million of equity raised from multiple new investors. This puts the company on course to become a top ten housebuilder.

The new funding will allow ilke Homes to invest heavily in automating more of its manufacturing processes to drive efficiencies, secure more sites and expand its ‘package deal’ strategy, which offers full development service of site, infrastructure and homes.

By manufacturing offsite, ilke Homes is able to deliver precision-engineered homes twice as fast as traditional methods of construction, helping investors access revenue streams faster.

The monies will also be used to scale-up production and accelerate capacity to deliver up to eight homes a day, up from two today - all helping to bring down manufacturing costs in the process.

The homes delivered are also highly energy-efficient, with the company able to deliver thousands of zero-carbon homes a year , as part of its ilke ZERO offering which was launched this year.

The company has already delivered zero-carbon homes on five sites across the UK.

The news follows a year of rapid growth which has seen ilke Homes grow its order book to more than £200 million, sign a deal with FTSE 100 firm Boots UK to deliver more than 600 homes in Nottingham, and appointed Crest Nicholson’s former chief executive, Patrick Bergin, as chief financial officer.

The Guinness Partnership, one of the UK’s largest providers of affordable housing and a customer of ilke Homes, is one of the new equity investors.

The housing association has signed two deals with ilke Homes in the last year for sites that will deliver 250 factory-built homes.

Tech-focused family office Middleton Enterprises and private equity firm Sun Capital have also taken equity stakes. TDR Capital has also injected further equity.

The £30 million of debt comes via a facility from Homes England’s Home Building Fund.

The Government’s housing agency invested an initial £30 million into ilke Homes in 2019 - it was the first time the agency had ever directly invested to boost an offsite manufacturer’s production capacity.

The latest announcement comes as the Government is championing offsite manufacturing as a solution to ramping up the delivery of high-quality, energy-efficient housing to tackle climate change and housing shortages.

Stephen Robertson, founding partner at TDR Capital, said: "Precision-engineering housing will be a critical solution to greening cities and with housing needs continuing to significantly outstrip supply, we are also confident that this sector is immensely scalable. We believe there is huge potential for multiple other investors to work with us on spearheading this positive change.”

Harry Swales, chief investment officer at Homes England, said: “Manufacturers like ilke Homes are vital if developers are to build new sustainable homes at the pace and scale the country needs."

Stephen Stone, a board member of ilke Homes, said: “This announcement proves that there is a shared ambition among the public and private sectors to find innovative solutions to structural issues that have dogged the construction and housebuilding industries for decades.

"This new funding will help us create hundreds more highly-skilled, green jobs for an economy that is gearing up for a green industrial revolution.

“The fact that our own clients continue to either invest or increase their stakes in the company is testament to the dynamic approach ilke Homes has taken to house building in the last three years. Faced with regulatory pressures and a requirement to meet ESG criteria, we are finding that investors are increasingly scaling up their MMC strategies."

The housebuilding industry has historically lacked the capacity and resources to innovate at the pace required to meet the Government’s 300,000-new-homes-a-year target, leading to a chronic undersupply of housing in the UK, where over one million families are currently on council waiting lists. In 2019-20, just 220,600 new homes were delivered.