Funding Boost For Government Build-To-Rent Plans

Funding Boost For Government Build-To-Rent Plans

Finance Secured To Build Thousands Of
Affordable Properties For Rental Purposes

Government housing minister Kris Hopkins has welcomed a deal that will release £500 Million (GBP) of additional funding to build new affordable residential properties in the UK.

The new investment finance has been secured through an agreement with the European Investment Bank (EIB), that will help deliver up to 4,300 new and affordable homes to rent in areas of the UK.

The funding is set to form part of the £3.5 Billion (GBP) Affordable Housing Guarantees programme, which enables housing associations to use Government guarantees to secure private investment at more competitive rates than they would otherwise be able to secure.Housing Minister, Kris Hopkins said: “Today’s deal with the European Investment Bank is a vote of confidence in our ongoing efforts to restore confidence to our housing market and get the UK building.  This £500 Million (GBP) investment will help deliver up to 4,300 new affordable homes across the UK, on top of the 170,000 new build properties we’ve already delivered since 2010 under the build-to-rent scheme.

Jonathan Taylor, European Investment Bank Vice President responsible for the UK said: “The initiative launched today will significantly enhance construction of affordable housing by housing associations across the country. The European Investment Bank recognises the importance of long-term investment in the housing sector and is pleased to work with the UK government and experienced housing partners through this new, large scale programme. Following the £500 Million (GBP) loan with the EIB formally agreed, we look forward to further engagement with the UK housing sector in the coming months.

Richard Blakeway, the Deputy Mayor for Housing, Land and Property said: “This new funding will help many hard working people who need, and rightly deserve, decent low cost homes. Tackling the demand for housing is a key priority and we all need to work closely together to boost affordable housing supply in London and across the UK.

Mr Hopkins confirmed the first 8 housing associations to receive funding through Affordable Housing Guarantees will be:

  • Devon & Cornwall Housing Limited, who will borrow up to £85 Million (GBP) to build 887 homes in those counties.
  • Hexagon Housing Association will borrow up to £12.5 Million (GBP) to build 74 homes in Greater London and the South East.
  • First Wessex will borrow up to £88 Million (GBP) to build 589 homes in Hampshire and Surrey.
  • Great Places will borrow up to £50 Million (GBP) to build 674 homes in Manchester and the North.
  • Wales and West Housing Association will borrow up to £25 Million (GBP) to build 251 homes in Wales.
  • Adactus will borrow up to £27 Million (GBP) to build 344 homes in Greater Manchester and Lancashire.
  • Home group will borrow up to £61 Million (GBP) to build 642 homes in England.
  • Paradigm will borrow up to £65 Million (GBP) to deliver up to 594 homes across South and East England, and Greater London

Together, they will receive up to £400 Million (GBP) to build, own and manage up to 4,000 residential properties for rental purposes.

The Affordable Housing Guarantees scheme is one part of the build-to-rent scheme, a wider package of Government measures being taken to get the UK building again and deliver thousands more affordable rental properties.

The Government is investing £19.5 Billion (GBP) of public and private funding to deliver 170,000 affordable properties for rental purposes over this spending review, and intends to invest around another £23 Billion (GBP) of public and private funding between 2015 and 2018 in order to deliver a further 165,000 affordable properties for rental purposes.

The Government are well aware of the potential profits that can be made from well structured deals in the UK’s private rental sector (PRS) and they want a slice of the action for themselves. The Government will probably strip as much as they can out of each and every deal before passing the properties on to local authorities to manage for them to use as social housing.

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