Housing associations will need to borrow more than £20 billion from banks over the next five years to continue to build new homes for those most in need, according to the Tenant Services Authority (TSA).
In its latest report on the sector, the social housing regulator also indicated a continued improvement in the housing and finance market conditions, with the quarterly survey results showing that housing associations have again reduced the backlog of unsold low-cost home ownership (LCHO) properties and are still securing new investment to deliver affordable housing.
The TSA's latest quarterly survey (July-September 2009) shows that:
As pressure on Government capital investment budgets tighten, the need for private finance to be raised at competitive rates remains central to delivering decent homes and new build targets. The TSA Board has approved a new private finance strategy to encourage existing and new banks to lend to housing associations.
The report forecasts that between £20 billion and £25 billion of new funds are required over the next five years for associations to continue to build new homes, improve existing homes, and provide quality services to tenants.
The strategy sets out how the TSA will continue to maintain the confidence of the retail lending markets and encourage the expansion of institutional investment in affordable housing. Based on recent market discussions, the TSA believes that the retail market has an appetite to lend £20 billion and that a further £5-10 billion could be raised through the bond markets.
