NatWest has launched a new £250m Section 106 Loan Fund aimed at helping housing associations acquire affordable homes from developers and unlock thousands of stalled housing units across England.
The initiative comes as housing associations continue to face increasing financial pressures, limiting their ability to purchase affordable homes delivered through Section 106 planning agreements. The resulting slowdown has left completed homes unsold and, in some cases, delayed wider housing developments.
NatWest’s fund will work alongside the £250m Section 106 Low Cost Loan programme recently announced by Homes England, creating a combined £500m package designed to support affordable housing delivery and accelerate housing supply.
The bank says the funding could help facilitate the acquisition of around 2,500 affordable homes while enabling the construction and sale of thousands more private homes that are currently tied up by delays in the Section 106 process.
SOCIAL HOUSING BOOST
The fund will be available to existing NatWest housing association customers that successfully secure funding through the Homes England programme, effectively doubling their capacity to purchase Section 106 homes. The loans will be offered at discounted margins and fees.
The launch forms part of NatWest’s wider commitment to the social housing sector. Earlier this year the bank announced a £10bn funding ambition for UK social housing by the end of 2028, taking its total support for the sector to more than £35bn since 2018.
Paul Eyre, Head of Residential and Housing Finance at NatWest, says: “In February, we set out a £10bn ambition to support the delivery and maintenance of social housing across the UK.
“This new £250m S106 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.”
NATIONAL MISSION
Housing Secretary Steve Reed welcomed the move, describing housebuilding as a national mission and highlighting the importance of private sector support in bringing forward stalled developments.
Industry bodies also backed the initiative. Neil Jefferson, Chief Executive of the Home Builders Federation, said the availability of housing associations to acquire Section 106 homes was critical to maintaining overall housing supply, while Kate Henderson, Chief Executive of the National Housing Federation, said the funding would help housing associations continue investing in affordable housing and support the sector’s ambition to deliver a generational increase in housing provision.
The announcement comes as government and industry seek new ways to accelerate housebuilding and address growing pressure on affordable housing supply across England.
