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£10bn guarantees announced for new rented homes

Up to £10bn in loan guarantees is being made available to increase the number of affordable homes built for rent, housing minister Mark Prisk has announced.

The Affordable Housing Guarantee Scheme will guarantee Affordable Housing Finance up to £3.5bn of debt, to be lent to housing associations. With £450m in government grants, this is hoped to fund up to 30,000 new homes to rent.

The Private Rented Sector Guarantee Scheme offers organisations such as property investors and developers looking to manage homes for private rent up to 33.5bn.

A further £3bn is being held in reserve, subject to further demand for the schemes.

Prisk said: “The £10bn Housing Guarantees Schemes are now open for business, with a groundbreaking new offer of low-cost lending to get spades in the ground, create new jobs and deliver thousands of new homes specifically for rent.

“With the government’s backing, investors can now unlock billions of pounds to build high quality homes for private and affordable rent. These changes offer a greater choice for new tenants across the country.”

Deputy Prime Minister Nick Clegg said: “Providing good quality, affordable housing for rent is essential to rebuild our economy after the heart attack it suffered in 2008, which made it harder to buy a first home and put more pressure on the private rental market.

“As well as building more affordable homes, the schemes we are launching today will mean more jobs in construction including apprentices – giving a much-needed jobs boost across the country.”

Chief Secretary to the Treasury, Danny Alexander said: “The guarantee programme is the first of its kind and will transform the way housing providers raise money for vital projects. I’m very pleased with the progress we’ve made to ensure that landlords and housing associations across the UK can take advantage of the strength of the UK’s balance sheet, and get on with delivering high quality and affordable homes.

“We must keep building on this momentum and I want providers to come forward and seize the unique opportunity that this scheme is offering.”

Piers Williamson, chief executive of The Housing Finance Corporation said: “The Housing Finance Corporation is delighted to be working with the Government to ensure the success of this innovative construct. As the most frequent issuer of Capital Markets debt for Housing Associations and through our 12 year record of working with the European Investment Bank, we have built up a great record for delivering cost effective and timely long term funding for Housing Associations. We look forward to reinforcing the government’s determination to promote incremental housing output.”

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