NatWest has launched a £250m Section 106 loan fund to unlock the delivery of thousands of affordable homes in England.
The fund will support housing associations who are looking to acquire affordable homes from housebuilders and help unlock stalled housing delivery in England.
The new NatWest fund matches the £250m of funding recently announced by Homes England as part of its £2.5bn low-cost loan programme, increasing total funding available for S106 acquisitions to £500m. The fund will be available to existing housing association customers that are successful in securing S106 low cost loan, which will double their capacity to purchase S106 homes. The loans will be offered at discounted margins and fees.
Paul Eyre, head of residential and housing finance at NatWest said: “In February, we set out a £10bn ambition to support the delivery and maintenance of social housing across the UK. This new £250m S106 loan fund is a practical example of that commitment in action – helping housing associations in England unlock sites, bring affordable homes into use and support wider housing delivery at a critical time.”
Steve Reed, housing secretary, added: “We need to build more affordable homes to bring down the number of families stuck on housing waiting lists. Housebuilding is a national mission and businesses like NatWest will have a pivotal role to play in helping us unlock stalled housing sites across the country and build the homes we need.”
Neil Jefferson, CEO of the Home Builders Federation, said: “With around half of affordable housing being delivered through the Section 106 cross-subsidy model, it is important that we have a functioning market for these much-needed affordable homes. without registered providers to take on these homes, we’re seeing overall housing supply slow or halt entirely. Moves to unblock the market and encourage registered providers to acquire homes already subsidised by private subsidy are very welcome and will help to boost the supply of both affordable and private homes.”
Kate Henderson, chief executive of the National Housing Federation, added: “Section 106 is fundamental to ensuring affordable housing remains at the heart of mixed communities across the country. This product is strongly welcome and will support housing associations to continue investing in section 106 homes, as part of the sector’s ambition to deliver a generational boost to social and affordable housing.”
