This begs two questions - Firstly 20bp over what gilt - the 10 year is currently 1.5% the 30 year 2.85%. Rented housing both affordable and social needs long term debt. So presumably we are talking about 3.05% rather than 2% as the cost of funds.
Secondly is this for new borrowing or will the guarantees apply retrospectively to old borrowing as well. If only new this could have the perverse effect of bringing all RP development to a shuddering halt. All developing RPs will want to wait for the new deal to materialise. After all why borrow at over 5% when there is the propspect, even if uncertain, of borrowing at 3%.
If this does only apply for new borrowing it will make the RPS that have borrowed close on £3 billion at over 5% in the last tow years look pretty sick.