£3 billion affordable housing boost to deliver 20,000 new homes
The expansion of government-backed loan scheme will support thousands of new homes.
20,000 new affordable homes will be built across the country, helping more people realise the dream of owning their own home, thanks to a £3 billion increase in a government-backed loan fund opening today (12 February 2024).
The expansion of the Affordable Homes Guarantee Scheme, which provides low-cost loans to housing providers, will support thousands of new homes. For the first time, the scheme can also be used to upgrade existing properties, making them warm and decent for tenants.
Providers will be able to apply for loans to carry out vital building safety works, such as the removal of dangerous cladding.
Backed by the Department for Levelling Up, Housing and Communities, the now £6 billion fund will help housing providers access low-cost loans so they can expand their business, build more affordable homes and upgrade their existing stock.
Housing Minister Lee Rowley said:
We know getting cost-effective loans can be a stumbling block for many developers building more affordable homes or upgrading their existing stock, so it is of the quality tenants deserve.
This new round opening today will not only improve the lives of those already living in homes, but help thousands of families benefit from new, high-quality, affordable housing.
Launched in 2020, the scheme, delivered by ARA Venn, is already helping 12 providers to deliver 6,290 new homes, with thousands more to be built in the coming years.
Among the beneficiaries of the scheme is Watford Community Housing. They first accessed the scheme back in November 2021 and it helped them build 200 new homes, including the firm’s first modular development.
As part of a second funding application made in December, they are set to build a further 100 affordable homes.
Watford Community Housing Deputy Chief Executive Paul Richmond said:
We were delighted to work with ARA Venn for a second time under the current Affordable Homes Guarantee Scheme. The funding represents excellent value for the sector and offers best value for fixed rate debt for our organisation.
The benefit of using the Affordable Homes Guarantee Scheme in terms of pricing over our 30-year plan is worth nearly 100 additional homes being delivered into our local community. This has significant commercial benefit to us but more importantly has a direct impact on the wider need to build more housing across the country.
Richard Green, Portfolio Manager for AHGS20 and Partner at ARA Venn said:
We are delighted that we will be able to provide low-cost loans to private registered providers across England to now facilitate investment in existing homes, in addition to new ones.
We look forward to continuing and building on the success of the Affordable Homes Guarantee Scheme, that has already proved a key source of funding for the sector.
This timely expansion of the scheme allows us to support the sector’s balancing of investment priorities between providing new homes and ensuring the quality and energy efficiency of existing homes.
The government is making good progress and is on track to meet its manifesto commitment to build 1 million homes this Parliament and the target to deliver 300,000 homes a year remains. This work is being supported by £10 billion investment to boost housing supply since the start of this Parliament. This is alongside the £11.5 billion affordable homes programme, which will unlock £38 billion in additional private investment.
Further information
The Affordable Homes Guarantee Scheme 2020 provides low-cost, flexible and long-term loans to help fund investment in new and existing affordable homes across England, including those for social rent, affordable rent and shared ownership.
As part of the scheme, providers will be able to apply for loans to help make homes fit for the future. These energy upgrades, such as solar panels, could potentially save tenants hundreds of pounds on their energy.
The loans are funded by a capital markets bond programme that has the benefit of a guarantee from the Department for Levelling up, Housing and Communities.
Eligible registered providers who would like further information about the scheme, the scheme rules, and how to apply should contact ARA Venn at [email protected]
ARA Venn is part of ESR Group, who have managed the Affordable Homes Guarantee Scheme 2020 since its launch in 2020.