Launching a new briefing paper on the funding options, the Council of Mortgage Lenders (CML) pointed out that private finance for social housing amounts to more than £27 billion so far, with some 1.5 million people having already seen improvements to their housing conditions in ways that would not have been possible had they been funded by taxation alone. A further 24,000 new homes have been built following the transfer of housing from council ownership with funding provided by mortgage lenders.
But while private finance has proved to be an efficient and effective way of stretching limited public funding and has brought market and business disciplines to the sector, social housing policy and funding is now approaching a crossroads, according to the CML. Lenders need a better dialogue with the Government to remove uncertainty that could restrict the capacity of private funding to provide extra resources for social housing.
With Deputy Prime Minister John Prescott expected to make a major announcement on housing policy later this month, lenders are calling for a broader discussion about how private finance could help improve standards in the social housing sector. Specifically, lenders would like to see:
• a continuing commitment to the large-scale, voluntary transfer of houses from council ownership to non profit-making organisations like housing associations, but with reforms and improvements to the system;
• greater clarity on the powers and capacity of local authorities to borrow from the private sector for housing purposes; and
• the introduction of a private finance option for the arms-length organisations that can now be set up to manage council homes.
