Government’s £3bn Affordable Homes Guarantee Scheme ‘ready for use’

The government and ARA Venn reached an agreement over the management of the fund in October last year.

Singapore-owned investment manager ARA Venn was the successful bidder from a pool that included social housing debt aggregator The Housing Finance Corporation, as well as fellow aggregators GB Social Housing and MORhomes.

Commenting on the agreement at the time, housing minister Christopher Pincher said: “Ensuring everyone has the opportunity to access a secure, affordable home is central to the mission of this government and our £3bn Affordable Homes Guarantee Scheme will play a vital part in achieving this.

“ARA Venn’s wealth of investment expertise will prove invaluable to delivering another 17,000 much-needed new affordable homes to families across the country.”

According to ARA Venn, organisations which look to access the funding must spend the equivalent amount on affordable homes to the amount borrowed under the scheme.

Construction of the homes must commence within 24 months of the funding being secured. Loans are secured against provider’s existing portfolios.

The bond forms part of plans unveiled by former chancellor Philip Hammond who said the government would explore “options with industry” to provide guarantees to support housebuilding, including SMEs and purpose-built rented housing.

In May, borrower interest in the new Affordable exceeded £1bn, with the scheme aiming to build up to 17,000 affordable homes over a three-year period.

The current £3bn government-backed bond scheme has the option to be increased by a further £3bn to a total of £6bn.