bond financing is to be among possible new financial models for stock transfer to be examined by a government working group.

The Office of the Deputy Prime Minister working group, announced in the Communities Plan, will meet for the first time next week.

Outgoing ODPM director of housing Mike Gahagan confirmed that extending the use of bond financing, as used by Sunderland Housing Group last year, will be on the agenda.

Gahagan, who retires from his post today, said: "The working group will be looking at what different models are available. Sunderland has taken the bond approach and we want to investigate whether we can extend that and push it a bit further. People say the levels are often too small for bond issues, so can you package them together – all that sort of thing [will be under discussion]."

A financial source close to the working group said: "The obvious issue would be ensuring that a number of transfers were able to run to the same timetable to allow one bond issue to cover them all.

"I'm not sure that there are hundreds of original schemes waiting to be pulled off the shelf, although I think it is likely that we will continue to rule out the use of equity shares."

He added: "the ODPM wants to be seen to have thoroughly examined all the options in advance of the National Audit Office report into large-scale voluntary transfer that will be published at the end of March".

The working group will report its findings in April.

Source

Housing Today