What is it?
Many councils have, over the years, withdrawn from housebuilding themselves. Some are now responding to the housing crisis by lending money to housing providers or social organisations which are in a better position to develop housing. Loans are a way for councils to generate some income as well as helping deliver on new homes targets.
Who’s doing it?
Hull council: Loaning £3m to the Goodwin Development Trust
Hull council agreed to provide a loan of £3m to the Goodwin Development Trust to enable the provision of around 40 new affordable and environmentally friendly houses in the city. The Homes and Communities Agency made an offer of £2m to the trust, which will cover around 50% of the cost of building the homes. The loan will be repaid by the trust using the rental stream paid by the tenants of the new homes. The council retains nomination rights on the homes and the right to buy scheme will not apply to the new units. The council also retained ‘step in’ rights’ to take ownership of the project in the event that the trust is unable to complete the scheme or honour the schedule of loan payments.
- More info here.
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