The government’s £10bn housing guarantees scheme is targetting the private rented sector and boost affordable housing, as bids for funding were today opened.
Two new schemes are aimed at providing investors with low-cost finance, chief secretary Danny Alexander and Housing minister Mark Prisk have announced.
The PRS guarantee will back a variety of options to invest in new homes for private rent, from building new homes to converting commercial spaces, with a minimum project value of £10m.
New homes must remain in the private rented sector until the cash is paid back.
The second guarantee scheme is to target new affordable housing projects, with the aim of unlocking 15,000 homes.
£225m is also being made available in grant funding for registered housing providers.
Qualifying homes must not have started on site, and must be commercially viable and well-designed.
Interested firms can apply today through the Official Journal of the European Union. Separate bidding documents are to be made available for the £225m of grant funding for affordable housing.
The guarantees are aimed at reducing risk for lenders by guaranteeing to repay the money in the event of a borrower default, enabling housebuilders to borrow below market rates.
Chief secretary Danny Alexander said: “The announcement today shows we’re getting on with delivering an ambitious guarantee programme, giving projects across the UK a unique opportunity to take advantage of the strength of the UK’s balance sheet, allowing businesses and homeowners to benefit from lower borrowing costs and more affordable housing.
“We must build on this momentum to boost vital investment in the housing sector, creating jobs, supporting small businesses and building the foundations for growth across the country.”
Housing minister Mark Prisk said: “We’re introducing groundbreaking measures to unlock the vast, untapped potential for growth in the private rented sector. Investors will now be able to draw upon low-cost lending so they can bring thousands of new homes into the market.
“The housing guarantee schemes will help to get spades in the ground, create jobs, and establish new business models that will ensure the private rented sector continues to grow and more affordable homes are delivered.”