Principality Building Society’s Commercial team has agreed to provide £50m in loans to housing associations in Wales.
Welsh housing associations plan to build 13,000 affordable homes by 2021 to meet the 20,000 affordable homes strategy set by the Welsh Government. Principality Commercial has supported affordable and social housing schemes in the past, including the Mill at Canton, plus several phases for the Welsh Housing Partnership.
Between them these two initiatives alone should see almost 1,500 affordable homes developed. In additio, the Society has committed £150m to housing associations across Wales.
Peter Hughes, Managing Director of Principality Commercial, said: “We want to help fund social housing in Wales as there is no doubt there is a shortage of affordable homes in many of our communities. It is important that businesses such as ourselves remain a flexible and supportive lender, responding constructively to market challenges.
“The funding landscape has changed significantly over the last few years but we believe we should lead by example and show that there is more than one way funds for social housing can be made available. European Investment Bank have played a key role in Wales in the past with infrastructure and long term funding and whilst we can’t commit to providing 30 year loans like the EIB, we believe our offer of 15 years plugs a real gap in the banking market.
“In particular, it can be challenging for some housing associations to access 30 to 40 year capital markets funding whereas the banking market is very much focused on shorter dated facilities of five to seven years. There has already been considerable interest in our proposals from the sector and we are in advanced discussions with several bodies. This commitment to social housing projects remains consistent with our approach in recent years. ”
Stuart Ropke, Chief Executive of Community Housing Cymru, said: “We welcome this vote of confidence for the Welsh housing association sector. Funding commitments such as this initiative from Principality will help our members to deliver the new homes Wales needs to meet the Welsh Government’s 20,000 affordable homes target. Injecting funding into the affordable housing sector also provides a proven boost for the wider Welsh economy. Our latest economic impact report found that Welsh housing associations contributed almost £2bn to the economy in 2015/16, with 89% of that £2bn retained in Wales.”