Rolling funds could help boost affordable housing

Published by 24publishing for 24dash.com in Housing and also in Central Government, Communities, Local Government

Rolling funds that could be used to help developments get off the ground but then get repaid and recycled have been proposed by the Chartered Institute of Housing (CIH) as a way for Government to help boost the supply of affordable homes.

Speaking today at the Chartered Institute of Housing (CIH) conference in Manchester, Gavin Smart, director of policy and practice at the CIH, discussed additional policy responses that could help boost the supply of affordable housing.

He said we shouldn't assume there is not a role for increased government investment in boosting supply and the part it can play in economic recovery.

He said: "I know we're under fiscal constraints but we're already talking about how housing can help support the economic recovery.

"I think we also need to understand subsidised housing needs subsidy - it doesn't work without it and there is a role for Government in helping to make that happen. We should be open to what form that Government investment or subsidy might take."

He said there were interesting conversations to have about "rolling funds" that are used to help developments get going but can then be repaid and recycled.

He said: "It's worth a conversation about whether Government and its investment agencies could take a stake in some affordable housing schemes  - but they must all have a proper appreciation of scheme viability."

He added: "There is room and a role for grant but it may not be the only thing."

He said NewBuy – where the Government is offering mortgage guarantees – was an "interesting idea" that could be explored further.

"Is there something the Government could do around a guaranteed fund that registered providers could bid for that would allow them to borrow at rates that were cheaper than the rates they might otherwise achieve? This is about stretching out our financial capacity. If Government is standing behind some of the borrowing that organisations do, and it makes that money go further, then that's a goal worth pursuing."

He added there were also interesting conversations to be had around creating a use class for rented housing. "Some people say that would be an important contribution to the supply of private sector homes."

He questioned whether affordable housing providers could add to what they're doing already and whether there was a role for housing associations providing private rented sector properties that would help cross subsidise affordable housing.

He added: “I'm interested in whether Real Estate Investment Trusts (REITs) have a role for local authorities. If you have land and it has a value, you might invest it into a REIT to maximise the return you can get from it.”