European funds to be offered at ‘best ever' rates
Cash from the European Investment Bank is to be available to housing associations at some of the 'best ever' lending rates, bankers have claimed.
The Housing Finance Corporation has secured £100 million of money from the EIB that it will lend to between 15 and 20 associations for new development projects.
Piers Williamson, chief executive of THFC, told Inside Housing that the margins the deal offered were better than 'any other deal that could be out there'.
The margins offered will be the banks' standard borrowing rate, known as Libor, plus 5 or 10 basis points, he said.
'Two or three years ago, housing associations were paying Libor plus 40 or 50 basis points,' he said. 'One housing association was recently jumping for joy because it got a deal of Libor plus 35 basis points.'
One senior lender said the margins being offered were vastly superior to mainstream rates. 'It is massively below what the market usually is,' the source said.
EIB is able to offer the money at reduced rates because it has the highest available credit rating and can access the money more cheaply than other mainstream banks.
THFC will act as an intermediary and lend the money on to housing associations in the UK with a margin of
The new money will take the EIB's lending to UK housing associations to around £350 million. The money will be lent over a 20-year period.