星空传媒

The government has announced the creation of a new publicly-owned National Housing Bank intended to accelerate delivery through loans, guarantees and direct investment.

Established as a subsidiary of Homes England, the new bank will be backed with 拢16bn of new financial capacity, on top of 拢6bn of existing finance to be allocated this parliament.

It aims to leverage 拢53bn of additional private investment, which the Ministry for Housing, Communities and Local Government (MHCLG) says will help deliver more than 500,000 new homes.

The new system will give Homes England, the UK鈥檚 national housing and regeneration agency, more autonomy and flexibility to make long-term investments and give it the ability to issue government guarantees directly.

MHCLG said the new bank would also support SMEs with new lending products, as well as enabling larger developers with more complex sites through infrastructure finance.

The government has also announced that the bank will deploy some of the 拢2.5bn in low-interest loans announced in last week鈥檚 spending review to help build social and affordable homes.

Housing association leaders have expressed a hope that this funding pot could be used on a proposed model aimed at easting a short-term balance sheet squeeze.

The so-called 鈥榓mortised鈥� grant or 鈥榬epayable subsidy鈥� model, which was   would see higher grant payments made upfront to housing associations and repaid later.

This would reduce the upfront borrowing required to fund development, thereby keeping interest payments lower and allowing housing associations to widen their interest cover ratio, which measures debt to income and is restricted by lending covenants.

Housing secretary Angela Rayner said: 鈥淲e鈥榬e turning the tide on the housing crisis we inherited 鈥� whether that鈥檚 fixing our broken planning system, investing 拢39 billion to deliver more social and affordable homes, or now creating a National Housing Bank to lever in vital investment.     

鈥淥ur foot is firmly on the accelerator when it comes to making sure a generation is no longer locked out of homeownership 鈥� or ensuring children don鈥檛 have to grow up in unsuitable temporary accommodation, and instead have the safe and secure home they deserve.鈥� 

It comes ahead of the government鈥檚 10-year infrastructure strategy, which is set to be published tomorrow (Wednesday).

>> See also: The chancellor鈥檚 拢39bn boost buys time for social housing 鈥� now innovative private finance models must step up to help deliver at scale

The government has already announced that the strategy will include 拢8bn for flood defences, 拢1bn to enhance and repair road infrastructure, 拢590m to take forward the Lower Thames Crossing and new public procurement rules to support British firms.

A National Housing Delivery Fund will complement capital investment from the new bank through 拢5bn in grant funding for infrastructure and land.

Homes England chair Pat Ritchie said the creation of the new public financial institution 鈥渂uilds on the Agency鈥檚 expertise at providing a wide range of finance to partners and places to unlock the delivery of new housing and mixed-use schemes鈥�. 

鈥淭he National Housing Bank also responds to calls from the housing sector, mayors and local leaders to increase the scale of available public and private finance for housing and regeneration, provide a broader range of flexible debt, equity and guarantee products, and enable more timely decision making,鈥� he said.

The government has also said it would work with the mayor of London to establish a City Hall Developer Investment Fund. 

Housing Today and G15鈥檚 State of the Capital report

Providing new social tenancies for the 323,800 households on London鈥檚 waiting lists would inject at least an additional 拢7.7bn a year into London and the UK鈥檚 economy.

However, while social housing providers and ministers are both aware of the need for more affordable housing, both housing associations and the government have balance sheets constraints.

This inaugural State of the Capital report, produced by Housing Today in partnership with G15, looks at several ideas that could be adopted to help the sector build much-needed affordable housing in London during these difficult times.

The report is written by Carl Brown of Housing Today, in collaboration with the G15.