Following consultation with the housing sector, the government has published the scheme rules for the lending guarantees for both affordable housing and private rented housing.
The scheme, announced last September as part of a raft of measures aimed at boosting housing and infrastructure, will see the government underwrite up to £10bn of loans to housing providers looking to build homes for rent.
The eligibility requirements and how the guarantees will be structured has been set out, along with an invitation to tender for the running of the schemes.
The private rented sector guarantee will back a variety of options to invest in private rent homes, from building new homes to converting existing commercial spaces into rental properties.
As the risk for lenders is reduced by the government’s guarantee to repay the money in the event of default from borrowers, the government believes this should enable housing providers to borrow at well below current rates, encouraging them to invest in the private rented market.
A separate scheme will be available to support new affordable housing projects. This will be complemented by £225 million of grant funding, for registered housing providers in England to deliver up to 15,000 new homes for affordable rent or affordable home ownership.
