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£8bn guarantees fund could be used for affordable housing
The government’s £8bn loan guarantees scheme could be used by housing associations to deliver affordable housing.
The Treasury has confirmed to Inside Housing that using the funds for affordable housing will be part of the consultation process for the policy.
Announcing the measure in his Autumn Budget, Philip Hammond said there would be “£8bn of new financial guarantees to support private housebuilding and the purpose-built private rented sector”.
Most in the sector assumed from this statement that the money would be used to renew the existing government guarantees scheme for private rent.
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The accompanying documents to the Budget, however, were slightly vaguer in their language, and the Treasury’s confirmation leaves open the possibility of a renewal to the Affordable Housing Finance (AHF) scheme, which guaranteed loans to associations to build affordable housing.
Piers Williamson, chief executive of AHF, told Inside Housing he was keen to be involved in the consultation process, adding: “That’d be great. Clearly we’ve already delivered, we know how to deliver, the government will go through a proper procurement process – let’s get on with it.”
AHF has provided borrowing to housing associations at very close to or even less than the cost of government borrowing since 2012 but is due to end next month.
The author of a report calling for £100bn of government borrowing to invest in housing over the next 10 years said the £8bn fund could be the closest thing in the Autumn Budget to that idea.
Phillip Blond, director of Res Publica, told Inside Housing that communities secretary Sajid Javid had told him that the government would follow through on the idea in some form, and said: “It’s the unspecified £8bn under housing guarantees where our hope now rests.”
Brendan Sarsfield, chief executive of Peabody, who helped to pitch the idea to the prime minister, said that the government would have to use the fund “creatively” by loaning to housing associations.
KEY BUDGET MEASURES AT-A-GLANCE
- Investment of £44bn in housebuilding in capital funding, loans and guarantees over the next five years to boost supply of skills, resources and land
- Commitment to be building 300,000 homes a year by mid-2020s
- £1.5bn package of changes to Universal Credit announced. This includes the scrapping of the seven-day waiting period at the beginning of a claim, making a full month’s advance available within five days of a claim for those that need it and allowing claimants on housing benefit to continue claiming for two weeks
- Lift council borrowing caps in "high-demand areas"
- A £125m increase over two years in Targeted Affordability Funding for Local Housing Allowance claimants in the private sector struggling to pay their rent
- New money into Home Builders Fund
- Extra £2.7bn for Housing Infrastructure Fund
- Invest £400m in estate regeneration
- £1.1bn on unlocking strategic sites
- Stamp duty for first time buyers on properties worth up to £300k will be axed, while the first £300k on properties worth up to £500k will also be scrapped
- Three new Housing First pilots announced for West Midlands, Manchester and Liverpool
- Councils to be given the power to charge 100% council tax premium on empty properties
- Government will launch a consultation to barriers to longer tenancies in the private rented sector
- £38m for Kensington & Chelsea Council for mental health and counselling services, regeneration projects in areas surrounding Grenfell Tower and a new community space
- Invest in five new garden towns
- £125m increase in Targeted Affordability Funding for Local Housing Allowance claimants in the private sector struggling to pay rent
