Select committee proposals could attract new equity investors
MPs to seek clarification over £43bn historic grant
MPs will next week call for clarification on the status of historic government grant as a potential means to free up billions of pounds worth of investment in social housing.
Sector insiders are unclear whether £43 billion worth of grant is classed as debt on the Treasury’s books.
The issue will be raised by the communities and local government select committee’s report into housing finance, to be published on Monday. The report will seek to encourage new investors to help fund social housing.
Among the recommendations there is likely to be a call to clarify the role of historic grant, which at present sits on housing associations’ balance sheets. While the money is classified as debt, it is only repayable to the Treasury if properties are sold. Some landlords claim the government altering its approach would make them more attractive to equity investors as landlords would be seen as having less debt.
The call echoes the response from Places for People to the Montague Review, which is examining the role of institutional investors in the private rented sector. The 62,000-home landlord’s submission, seen by Inside Housing, said financiers would be more likely to fund social housing if grant were wiped off the balance sheet.
‘We need to know what the status of grant is on the government’s books, then we can know what our options are,’ said Simran Soin, finance director at Places for People. ‘We’ve asked the question a number of times and have never got an answer.’
Mr Soin added that ‘headroom’ created if the Treasury removed grant from the balance sheet would leave space for private equity investment.
Among a range of proposals, the committee, chaired by Labour MP Clive Betts, is also expected to call for a push on custom and self-build housing.
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