Housing left out of £50bn guarantees scheme
An expected boost for the affordable housing sector has failed to materialise as part of a £50 billion package being announced by the Treasury today.
Rumours earlier in the week had suggested ministers were preparing to announce a government guarantee scheme to encourage lending to the sector. But the ‘UK Guarantees’ scheme being unveiled today instead focuses on large infrastructure projects such as transport and energy.
Although the house building sector may gain as a result of these, and from a smaller £6 billion of support for public private partnerships, the anticipated large-scale support for the affordable housing sector has not yet appeared.
Prime minister David Cameron said in May that he had asked the Treasury to examine ‘what more we can do to boost credit for business, housing and infrastructure’.
Ministers and officials subsequently met with senior figures from the social housing and house building sectors to discuss how the government could support lending, but these discussions have yet to result in any confirmed plans.
Gavin Smart, director of policy and practice, described the lack of support for housing as a ‘missed opportunity’, but added: ‘There is a chance that government will look to issue further guarantees with housing being one of the areas targeted.’
Under the PPP element of UK Guarantees the government will offer loans on commercial terms for projects that are struggling to access finance from the private sector. These could include housing, health, transport and education projects, and they must be able to go ahead in the next 12 months.
The larger infrastructure element of the guarantee scheme will not offer loans but will instead offer government security to encourage lending. Around £40 billion of projects are expected to be eligible.
A further £5 billion is being made available as an export refinancing facility for overseas buyers of UK goods.