Homes England set to lose £64.5m on Ilke Homes

Homes England may be in line to recover £4.3m from the collapsed Ilke Homes administrators have now said, leaving it with a loss of £64.5m.

Private equity-backed offsite specialist Ilke went into administration in June, with a loss of more than 1,000 jobs.

An initial report from administrators at AlixPartners said the government’s housing agency was likely to recover £1m of the £68.7m it had lent to the builder through a finance facility agreement since 2019.

A follow-up released this month, however, reduces the estimated loss by £3.3m.

Cash available to Homes England was thought to have been reduced last year, due to the theft of plant and equipment from one of Ilke’s factories and problems selling completed modules.

The administrators have since sold land in Whitehouse, Milton Keynes for £11m, and in Edgbaston, Birmingham, for £1m.

The information was revealed in a report regarding Ilke Homes Land Ltd and Ilke Homes Holdings Ltd. Ilke Homes Ltd was put into liquidation last year.

Ilke Homes Land owes unsecured creditors £39.4m, while Ilke Homes Holdings owes £29.3m. Those creditors are expected to receive 2p and 0.1p in the pound, respectively.

Ilke Homes Ltd owed £239m to unsecured creditors, none of whom received anything.

Homes England’s lending and investment policies have recently been questioned following a number of industry insolvencies.

In 2022 it was hit by the collapse of modular firm House by Urban Splash, into which it had pumped £30m and owned a 4 per cent stake. Construction News understands it recovered £27m of the cash.

Homes England also partnered with Inland Homes in April 2020 to develop more than 600 homes in Basildon, Essex. The housebuilder went under in September 2023 before the project was complete.

Talks are ongoing about selling assets owned by Inland Homes to Homes England, according to the latest administrators’ report.

Last month, the House of Lords’ Built Environment Committee criticised the government for lacking a clear strategy on its investment in modern methods of construction (MMC).

Its chair Lord Daniel Moylan later told CN he was “unpersuaded that Homes England knew what it was doing” when investing in Ilke Homes and Urban Splash.

“We are not criticising Homes England for making an investment that lost money – [but] that doesn’t excuse you for not doing due diligence and not having a strategy for what you want to achieve.

“We asked Homes England what its strategy was, it said it was spread across documents and departments. [Which] we take as meaning they don’t have a strategy.”

On Ilke, a spokesperson for the agency previously said that investing in MMC was a core part of its remit to “support the creation of a more resilient, diverse and innovative housing sector”.

They added: “There is always an inherent risk when investing in new technologies with new business models that look to do things differently, but we remain committed to encouraging greater use of MMC, supporting its growth, and diversifying the housing market.”

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