Housing guarantees
In September 2012, housing guarantees were announced by the government in an attempt to incentivise and kick-start private investment in the housing sector.
The private rented sector (PRS) Housing Guarantee Scheme was introduced with a management contract awarded to Venn Partners in 2014. The aim of the guarantee was to make vital finance available for projects across the UK as long as they have a minimum value of £10 million.
The government promised to guarantee up to £3.5bn of debt which helps to reduce the risk for lenders by guaranteeing to repay the money in the event of a borrower’s default. Taking this approach, housing providers are able to borrow at well below current rates, encouraging more investment in the private rented market. The new homes must remain in the PRS until the money is paid back.
The maximum loan-to-equity ratio of the guarantees is 80:20, with a maximum loan period of 30 years.
A separate guarantee scheme was set up for affordable housing projects. This aimed to unlock £225m of grant funding for registered housing providers in England to deliver up to 15,000 new homes for affordable rent or affordable home ownership.
The Department of Communities’ have extended the deadline for applications, which are processed once detailed planning has been obtained, to December 2017.
[edit] Find out more
[edit] Related articles on Designing Buildings Wiki
- Affordable housing.
- Guarantees.
- Housing shortage.
- Housing tenure.
- Housing white paper 2017.
- National Planning Policy Framework.
- Private rented sector PRS.
- Public v private sector housing.
- Real Estate Investment Trusts.
- The Community Infrastructure Levy (Amendment) Regulations 2014.
[edit] External resources
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