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<p> </p><p>The Government guarantee schemes do not involve the direct payment of funds.
Instead, the Government guarantees the borrowing of approved housing providers in
order to reduce the risk for lenders and therefore the risk for investors in lending
to house builders. This lower risk leads to borrowers paying a lower interest rate
and the schemes enable them to access more finance. As this finance is also cheaper,
it leaves more money for the house builders in the schemes to plough back into house
building.</p><p>There are two housing guarantee schemes: one to support the delivery
of additional affordable homes, and one to support the delivery of large scale professionally
managed purpose built accommodation for private rent. Both schemes run to 2016.</p><p>The
Government will guarantee up to £10 billion of housing providers’ debt through the
two schemes: up to £3.5 billion of guaranteed debt is available for affordable housing,
up to £3.5 billion of guaranteed debt is available for the private rented sector and
up to £3 billion of guarantee capacity is held in reserve. The debt on both schemes
is to be raised primarily through a delivery partner. The debt can be in the form
of loans, through the European Infrastructure Fund, or through bond issuance.</p><p>Under
the Affordable Housing Guarantee Scheme, the Government has so far announced commitments
to guarantee £633 million worth of debt for 16 housing providers, which together are
expected to deliver 5,900 additional affordable homes.</p><p>On 30 May 2014, the first
bond of the affordable housing guarantees scheme was issued by our delivery partner,
Affordable Housing Finance backed by a full faith guarantee from Department for Communities
and Local Government. With Government backing, this bond achieved the lowest price
for debt in the affordable housing sector’s history and supported £208 million of
the £633 million of approved borrowing. We are considering further proposals for credit
and expect to announce further additional borrowers shortly.</p><p>Under the Private
Rented Sector Guarantee scheme, the Government has been procuring a delivery partner
and has been actively engaging with large borrowers interested in the scheme. We expect
that a delivery partner when appointed will significantly increase access to the scheme
and maximise the number of new build homes for private rent. We will be making further
announcements on this scheme in due course.</p><p>In addition to this, the Build to
Rent Fund provides development phase finance to large-scale private rented sector
developments, delivering up to 10,000 new homes for private rent and demonstrating
the viability of developing and investing in private rented sector developments. Eleven
deals have so far been announced to date worth £151 million, which will deliver approximately
2,000 new homes for private rent. More schemes will be announced in due course.</p><p>Such
institutional investment in private sector accommodation is dependent on an environment
which is free of excessive regulation. Disproportionate regulation on the private
rented sector, which this Government opposes, would discourage and undermine such
private investment in new homes.</p><p> </p><p> </p><p> </p>
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