A new £250M loan has been made available to social housing providers, aimed at boosting the delivery of Section 106 homes specifically.
The increasing delays in the purchase of Section 106 homes has left houses marked for affordable rent by housebuilders left vacant across the country, as financial pressures have restricted providers’ ability to purchase them across England. The issue was highlighted as a cause for concern by the G15, and earlier this year the government released a dedicated Section 106 roadmap that included measures aimed at unlocking and streamlining delivery of affordable homes through the policy.
Further support has now been offered in the form of a £250M loan from NatWest, aimed at supporting housing associations to acquire affordable homes from housebuilders.
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The new NatWest fund matches the £250 million of funding recently announced by Homes England as part of its £2.5 billion low-cost loan programme, increasing total funding available for S106 acquisitions to £500 million. The fund will be available to existing Housing Association customers that are successful in securing S106 Low Cost Loan, which will double their capacity to purchase S106 homes.
Together, this funding could support the acquisition of around 2,500 S106 homes, while facilitating the delivery of thousands more homes for market sale. The loans will be offered at discounted margins and fees.
Housing Secretary Steve Reed said: “We need to build more affordable homes to bring down the number of families stuck on housing waiting lists. Housebuilding is a national mission and businesses like NatWest will have a pivotal role to play in helping us unlock stalled housing sites across the country and build the homes we need.”
Kate Henderson, National Housing Federation Chief Executive said: “Section 106 is fundamental to ensuring affordable housing remains at the heart of mixed communities across the country. This product is strongly welcome and will support housing associations to continue investing in section 106 homes, as part of the sector’s ambition to deliver a generational boost to social and affordable housing.”
The announcement is part of the bank’s five point Growing Together plan, setting out how the bank will help build the conditions for UK wide growth.
The financial conditions restricting providers’ ability to purchase Section 106 homes is a concerning symptom of widespread economic struggle in the UK, and has left many homes across the country standing empty whilst simultaneously homelessness and the use of temporary accommodation becomes widespread. The situation has been called the CIEH an ’empty homes emergency’, and other industry bodies have urged for innovative measures to be employed in order to make the most of the properties we already have.
