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AHF prices £25m of loans
Government-backed borrowing vehicle Affordable Housing Finance (AHF) has priced another £25m worth of loans.
The aggregator drew the funds from its European Investment Bank (EIB) II facility, which has traditionally been a source of low-interest borrowing for housing associations.
AHF issues bonds to help housing associations with development and the government underwrites the loans to achieve cheaper rates of borrowing.
The 13,000-home association Adactus, based in the North West of England, borrowed £15m at a fixed rate of 2.09%.
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Merlin Housing Society, which is currently in merger talks with Bromford, borrowed £10m at a similar fixed rate of 2.1%. The association provides community care to more than 18,000 people and manages over 8,000 homes.
Piers Williamson, chief executive of AHF, said: “After nearly five years of successfully delivering cost-effective debt under the Affordable Homes Guarantee Scheme, we have observed no lull in business.
“Over 30,000 units have been built under the scheme, and these latest transactions show how cost-effective AHF’s EIB facility is.”
AHF has nearly exhausted all its funding and no specific plans have been announced by the government to continue the scheme or start something similar.
In the Autumn Budget, however, Philip Hammond announced an £8bn fund to guarantee housing loans.
Initially, the chancellor suggested it was for private rented housing, but the Treasury later confirmed to Inside Housing that it would consult on the possibility of making the money available to housing associations for affordable housing.
