NatWest has launched a £250 million loan fund to help deliver thousands of affordable homes in England. The bank, which has branches in Birmingham, announced the launch of a new £250 million Section 106 Loan Fund.
NatWest plans to use it to support housing associations in acquiring affordable homes from housebuilders and help unlock stalled housing delivery in England. Section 106 homes are affordable properties delivered by housebuilders as part of planning agreements with local authorities. In recent years, housing associations have faced increasing financial pressures, reducing their ability to acquire these homes at previous volumes.
Funding Boost for Affordable Housing
The new NatWest fund matches the £250 million of funding recently announced by Homes England as part of its £2.5 billion low-cost loan programme, increasing total funding available for Section 106 acquisitions to £500 million. The fund will be available to existing Housing Association customers that are successful in securing the Section 106 Low Cost Loan, which will double their capacity to purchase such homes.
Together, this funding could support the acquisition of around 2,500 Section 106 homes, while facilitating the delivery of thousands more homes for market sale. The loans will be offered at discounted margins and fees.
Industry Leaders Welcome the Initiative
Paul Eyre, Head of Residential and Housing Finance at NatWest, said: “In February, we set out a £10 billion ambition to support the delivery and maintenance of social housing across the UK. This new £250 million Section 106 Loan Fund is a practical example of that commitment in action — helping housing associations in England unlock sites, bring affordable homes into use and support wider housing delivery at a critical time.”
Labour Party Housing Secretary Steve Reed commented: “We need to build more affordable homes to bring down the number of families stuck on housing waiting lists. Housebuilding is a national mission and businesses like NatWest will have a pivotal role to play in helping us unlock stalled housing sites across the country and build the homes we need.”
Neil Jefferson, CEO of the Home Builders Federation, said: “With around half of Affordable Housing being delivered through the Section 106 cross-subsidy model, it is important that we have a functioning market for these much-needed Affordable Homes. Without Registered Providers to take on these homes, we’re seeing overall housing supply slow or halt entirely. Moves to unblock the market and encourage Registered Providers to acquire homes already subsidised by private subsidy are very welcome and will help to boost the supply of both Affordable and private homes.”
Kate Henderson, Chief Executive of the National Housing Federation, added: “Section 106 is fundamental to ensuring affordable housing remains at the heart of mixed communities across the country. This product is strongly welcome and will support housing associations to continue investing in Section 106 homes, as part of the sector's ambition to deliver a generational boost to social and affordable housing.”
