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Chair of London landlord group welcomes low-interest loans as mayor confirms £1.5bn share
Ian McDermott, chair of the G15 London landlord group, has welcomed confirmation that the capital will receive a £1.5bn share of low-interest government-backed loans.
Ian McDermott, chair of the G15 London landlord group, has welcomed confirmation that the capital will receive a £1.5bn share of low-interest government-backed loans #UKhousingMr McDermott, who is also chief executive officer at London association Peabody, said the low-cost, long-term funding will have a “positive impact” and accelerate delivery in the years ahead.
“At Peabody and across the G15, we’ll continue to do all we can with the mayor and the boroughs to help reduce homelessness and overcrowding and meet urgent housing need across the capital,” he said.
It comes after London mayor Sir Sadiq Khan confirmed the capital will get a £1.5bn share of the £2.5bn national loan scheme announced by the government last week.
The loans for housing associations will be administered through the City Hall Developer Investment Fund (CHDIF) over the next year.
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They will be offered at an interest rate of 0.1% over 25 years, well below current market rates.
Bidding for the loans will start after the first grant allocations from the Social and Affordable Homes Programme are announced, which is expected to be in October this year.
City Hall said the loans will provide additional support to help build more homes through “innovative finance”, helping to unlock challenging sites across London and supporting Sir Sadiq’s action to deliver more homes for thousands of Londoners.
The CHDIF was allocated millions in grant funding in October last year as part of new emergency housebuilding measures announced by the mayor and housing secretary Steve Reed.
Last week, housing minister Matthew Pennycook confirmed the loans will mainly be used to deliver homes with social and affordable tenures, but said up to 10% of the total £2.5bn pot could be used to buy up Section 106 homes.
The loans will be administered by the Greater London Authority and the National Housing Bank, which is a subsidiary of Homes England and will launch in April.
Sir Sadiq said: “This £1.5bn investment from our new City Hall Developer Investment Fund will help us kickstart the delivery of more affordable homes.
“We’re doing something that hasn’t been done in decades – providing low-interest loans to build the affordable homes Londoners desperately need.
“There are so many good, affordable housing projects in our city that need some extra support to get going. These low-interest loans will help make these homes a reality.
“I will continue to work closely with government, councils and other partners and do everything I can to accelerate the delivery of genuinely affordable homes as we continue to build a better, fairer London for everyone.”
Kate Henderson, chief executive of the National Housing Federation, said: “We strongly welcome these low-cost, long-term loans being made available to help turn the tide on the housing crisis in London.
“Housing associations are eager to build much-needed, truly affordable social homes across the capital and these loans will help unlock their capacity to do so at scale and pace.”
Rachael Williamson, director of policy, communications and external affairs at the Chartered Institute of Housing, said: “This additional investment in the City Hall Development Investment Fund is a welcome boost for affordable and social housing delivery in London.
“Long-term, low-cost finance will help housing associations unlock complex sites and maintain momentum in building the homes Londoners urgently need. Partnership approaches like this are vital to supporting delivery at scale in challenging market conditions.”
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