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Clegg signals help for stalled social housing

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Housing association new build schemes could be unlocked with government help

Deputy Prime Minister Nick Clegg has said that the government hopes to use its financial muscle to get projects restarted by making it easier for associations to borrow cash for development, possibly at the lower interest rates that the government enjoys.

He told a conference of the Liberal Democrat party group Social Liberal Forum this weekend: ‘Where a scheme has planning permission but no finance we could use the government balance sheet to remove risk from them going ahead; it is one of biggest things we can do to build more homes.’

Construction News reports that National Housing Federation finance policy leader Joseph Carr said: ‘There has been quite a lot of work on this idea, which could allow associations to borrow more easily as the government would be behind them.

‘If that meant they could more borrow more cheaply, they could also build more homes.’

He said associations had difficulty accessing bank leading because of the banks’ present general reluctance to lend, but had been quite successful in borrowing from new sources such as the capital markets.

One housing finance expert said: ‘I think the government’s idea is to provide associations not with loans but rather help with borrowing costs.

‘I also believe there are efforts going on to link financial institutions that want a long-term investment with housing associations that want long-term borrowing at cheaper rates.’

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