The UK’s National Wealth Fund (NWF) has confirmed an initial £150m financial guarantee to help The Housing Finance Corporation (THFC) make long-term, unsecured loans to help registered providers (RPs) retrofit social housing stock.
The NWF’s guarantee unlocks long-term unsecured capital for RPs at pricing usually reserved for secured lending.
As a result of the NWF’s backing, Rothesay, the UK’s largest specialist pensions insurer, has committed to provide THFC with 100% of the initial £150m investment. THFC and the NWF hope to grow the scheme to £250m over the next six months depending on take-up.
Retrofit loans provided by THFC can be used by social housing providers for the installation of low carbon heating, insulation, low carbon lighting, renewable energy, ventilation and heating controls, as well as work on resilience measures and biodiversity.
Chancellor of the exchequer, Rachel Reeves, said: “Growth to get more money in people’s pockets is my number one priority. This new partnership will unlock £150m in private investment and create further jobs, building on the 6,500 jobs already expected in the retrofit sector across the UK, so more people can get sustainable, high-quality, energy efficient social housing.
“The National Wealth Fund is mobilising billions of pounds of investment in our world-leading industries, creating jobs and kickstarting economic growth, as we deliver on the country’s priorities in our Plan for Change.”
John Flint, chief executive officer of the NWF, added: “This is another example of the NWF working collaboratively with the private and public sector to provide practical solutions to complex financing problems. The launch of a long-term, attractively priced, unsecured offer into the market by THFC, will accelerate uptake and increase the ambition of projects in retrofit. Our support for THFC builds on our work in the sector, helping mobilise long-term institutional capital like Rothesay’s into social housing retrofit which will give confidence to both the sector and associated supply chains.”
Priya Nair, chief executive of THFC, said: “As the largest provider of institutional capital to the social housing sector, THFC is committed to solutions that enable the industry to improve homes and create sustainable communities across the UK. Partnering with the NWF on this innovative approach to retrofit funding will bring significant benefits to the sector. The collaboration will help decarbonise the social housing sector and support the country’s net zero ambitions.”
Tom Pearce, chief executive of Rothesay, added: “As a long-term investor in the UK, Rothesay is pleased to provide the funding for the launch of this new facility, supporting housing associations across the country to access the investment they need to reduce their environmental impact. Innovative partnerships like these have the potential to unlock significant volumes of institutional capital and we are committed to continuing to work with the NWF and THFC to support the growth of the facility along with other future initiatives.”
