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THFC expands lending offer to give associations more access to cash
Housing associations will be able to access long-term funding within days under new lending programmes being rolled out by The Housing Finance Corporation (THFC).
THFC expands lending offer to give associations more access to cash #UKhousingThe aggregator, which currently holds £8.4bn in loans to associations, said it was expanding its range of products to give landlords more “flexibility, choice and speed” when looking to borrow.
The expansion includes new funding programmes open to housing associations across the UK, as well as new bond structures and a broadened fast-access facility that allows them to agree loans in advance and draw down the money within days when they need it.
Under the new facility, landlords can secure cash while keeping their options open on when, how much and for how long they borrow, with the longest arrangements lasting for up to 36 months.
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It comes as housing associations face rising borrowing costs as a result of the Iran war. The Bank of England held rates at 3.75% in March after the war derailed expectations of a cut, with hikes now possible if energy prices stay high.
Higher rates would compound pressures on associations. Even before the war, THFC warned at the start of the year that many borrowers would need to refinance at rates “considerably higher” than their existing plans.
The new programmes will also bring in fresh bond structures, including zero-coupon bonds that allow associations to delay interest payments until the end of the loan, designed to help free up cash during periods of more building activity.
They will also allow lending to intermediary financial vehicles that pass funding on to not-for-profit housing providers, giving larger housing groups with more complicated structures more options in how they access finance.
Andrea Jelic, senior director of capital markets at THFC, said: “Housing associations across the UK are facing growing pressure to deliver new homes, invest in existing stock and meet evolving regulatory expectations.
“Our new funding programmes are designed to give them greater flexibility, choice and speed when accessing capital markets finance, so they can continue to invest and deliver at scale.
“By broadening the range of structures available and opening access to a wider group of organisations across all four nations, we’re strengthening our mission to provide affordable finance for the sector, supporting housing associations to respond confidently to changing financial and operational demands.”
Ms Jelic joined THFC in the new year as senior director of capital markets, and is responsible for all aspects of financing, investor relations and key stakeholder engagement.
She has over 16 years of debt capital markets experience, having previously worked at HSBC, RBC and Nomura, where she advised major UK and European public sector institutions on various aspects of their bond issuance programmes.
At the time, Priya Nair, chief executive at THFC, said the new recruit “will support our mission to provide stable, sustainable financing for affordable homes across the UK”.
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