星空传媒

The Housing Finance Corporation (THFC) is backing a report by 星空传媒鈥檚 sister title Housing Today and the G15 group of housing associations calling for affordable housing funding reform.

Priya Nair, chief executive of THFC, a non-profit organisation which issues bonds on behalf of social landlords, said the State of the Capital report鈥檚 recommendations 鈥渄emonstrate just the kind of thinking our sector urgently needs鈥�.

The report makes several recommendations for boosting affordable housing delivery. It suggests an amortised grant funding model could help London鈥檚 housing associations commit to development while making it easier for the cash-strapped government to invest in affordable housing.

Nair said: 鈥淭his report champions those innovative solutions and provides a clear, actionable roadmap towards boosting the UK鈥檚 stock of affordable housing.

鈥淚t is vital that policymakers and industry work in partnership to make this vision a reality and genuinely move the dial on financing for the affordable housing sector.鈥�

Under the amortised grant model housing associations would receive a higher amount of development grant per unit upfront. This would mean the housing association initially needs to borrow much less money privately to make up the development costs, meaning net rent could more easily cover costs without worsening interest cover metrics.

Over time, the association would pay back some or all of the grant interest-free to government. The advantage of this for the Treasury is that the grant paid back can be classified as an investment instead of as straightforward debt or expense to the taxpayer.

As reported last month, civil servants have shown  in the run-up to the June spending review. Officials from the Ministry of Communities and Local Government and the Treasury are in dialogue with G15 leaders about the idea.

The amortising grant model is seen by the G15 as a supplementary model which won鈥檛 be for everyone in the sector and is needed in addition to more 鈥渇undamental鈥� asks also outlined in the State of the Capital report around the rent settlement, rent convergence, access to the building safety fund and grant funding.

The report also calls for affordable housing to be reclassified as national infrastructure.

The State of the Capital was also this week welcomed by property consultant JLL.

Richard Petty, head of UK residential valuation and Marcus Dixon, Head of UK Living and Residential Research at JLL, said: 鈥淲e welcome this first report from the G15 and Housing Today.

鈥淚t is a concise, thoughtful and innovative package of ideas that, as a package of measures, could really start to make a difference to the delivery of more affordable homes in London.鈥�

Robyn Lee, managing director at real estate investment and development company HSPG, said: 鈥淲e鈥檙e pleased to see the State of the Capital report highlight the scale of London鈥檚 housing challenge, alongside practical solutions that could truly have a positive social impact.

鈥淩eclassifying affordable housing as critical national infrastructure is a crucial step. This recognition would bring much-needed investment and long-term focus to deliver safe, secure homes for the most vulnerable members of society.鈥�