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Housing association debt held by BoE hits £630m as fifth landlord uses COVID-19 scheme
PA Housing has become the latest housing association to access the Bank of England’s (BoE) Covid Corporate Financing Facility (CCFF) and sold £30m in short-term debt to the bank.
The 23,000-home landlord is the fifth housing association to sell short-term debt to the bank since the scheme was set up in March to help firms curb coronavirus disruption to their cash flows. This means the BoE currently holds £630m in debt from UK housing associations.
Simon Hatchman, executive director – resources at PA Housing, told Inside Housing: “Throughout the COVID-19 pandemic, our focus at PA Housing has been on doing all we can to safely support our customers and colleagues.
“While this job continues, we are also focusing on life beyond lockdown. We want to ensure our continued financial strength and to use this to build at least 500 good-quality, affordable homes each year to help tackle the housing crisis.”
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According to PA Housing’s corporate plan, 50% of these homes will be for affordable or social rent, 40% for shared ownership and intermediate rent, and 10% will be for market sale.
L&Q, Optivo, Platform Housing Group and Flagship Homes have also increased their liquidity via the CCFF scheme.
So far only G1/V1-graded associations have used the scheme despite the BoE revising its framework to allow V2-rated associations to apply.
Inside Housing understands that since its introduction, the BoE has tightened rules around those accessing the scheme, including agreements that users will not increase pay for senior staff.
Data from the bank released on Thursday last week shows it currently holds £17bn in outstanding commercial paper from 62 organisations including Lendlease, John Lewis and Marks and Spencer.
The CCFF scheme was set up alongside the extension of the BoE’s existing Corporate Bond Purchase Scheme, which was increased from £10bn to £20bn by chancellor Rishi Sunak.
