The European Investment Bank has agreed to loan £1bn for new social housing investment across the UK in partnership with the Housing Finance Corporation (THFC). The expanded Affordable Housing Finance programme will help to alleviate shortages in affordable housing and accelerate construction of new build social housing.
The new engagement represents the largest ever support for social housing by the European Investment Bank anywhere in Europe and follows the successful allocation of a previous £500m loan, signed in December 2013, under the Affordable Housing Finance initiative, to registered providers of social housing in the UK. The 30 year long-term EIB loan will be matched by THFC, and benefit from a government guarantee, and support £2bn of overall investment in new social housing and urban regeneration schemes by housing association across the country.
Over 20,000 new affordable homes backed by EIB are expected to be built under the initiative and local housing associations expected to build new affordable properties range from some of the largest London based housing associations to community based associations in areas as diverse as Glasgow, Wigan, Scarborough, Bradford, and Cambridge. This works out at around £50,000 per property.
“The European Investment Bank has a firm commitment to supporting investment in social and affordable housing across the UK, where we provide nearly half of overall EIB support for social housing in Europe. This record new backing builds on a successful partnership with THFC and the EIB’s strong track record of providing nearly £2bn for investment in social housing by more than seventy housing associations across the country. Local investment under this initiative will improve lives, create jobs and cut heating bills in homes across the UK.” said Jonathan Taylor, European Investment Bank Vice President.
Piers Williamson, Chief Executive of THFC and AHF said: “Affordable Housing Finance, working in partnership with Government, is sourcing some of the most cost-effective long-term finance ever utilised by Housing Associations to underpin the delivery of badly needed affordable homes, across Great Britain. We completed the first drawdown under this facility yesterday for GreenSquare Housing Association at a long term rate of 1.93% or 0.27% below the UK Government’s own funding rate”.
GreenSquare's Chief Executive, Howard Toplis, said “This funding is great news for people in need of housing across Wiltshire, Oxfordshire and Gloucestershire, who are going to benefit from our ambitious new homes development programme. We are delighted that we have achieved this loan rate, which we understand is a record low. We can now confidently embark on our development programme to build 1,000 homes in the next five years, helping us to not only increase the number of new good quality, affordable homes across our areas of operations, but also allowing us to add value to the wider communities where we have homes.”
In excess of 70 housing associations have already applied for financing under the new Affordable Housing Finance initiative and others are expected to be assessed in the coming weeks. £500m has already been signed earlier this year with the remaining £500m to be signed in the coming weeks.
The new EIB support was formally announced during a site visit by Jonathan Taylor, Vice President of the European Investment Bank and Piers Williamson, Chief Executive of The Housing Finance Corporation to a housing regeneration programme in South Kilburn managed by Network Housing Group and backed by the Affordable Housing Finance programme.
“We are delighted to see the strong association between THFC and the European Investment Bank continuing. Competitively priced funding from the EIB, through THFC, has played a key part in supporting Network’s major development programmes, including our 229 home regeneration of South Kilburn Phase 2. It’s great that more housing associations and, ultimately, more people in housing need will now benefit from their continued collaboration.” said Helen Evans, Chief Executive, Network Housing Group.
The European Investment Bank has provided more than £4.2bn to support investment in social housing and urban renewal across the UK since 1998. Most social housing lending has been in partnership with THFC and since 2014 the EIB has worked directly with leading housing associations, such as Sanctuary Housing.
Lending by the EIB in the UK last year totalled £5.6bn and supported long-term investment in 40 projects across the country. This represented the largest annual engagement since the start of EIB lending in the UK in 1973 which has supported nearly £16bn of overall investment.