Ian Handley, director for Truestone Private Finance, said he had been invited by several housing associations to provide strategic thinking on a solution as to how the government could provide funding itself.
He said the government was looking to use the overall housing market in a more efficient way and was considering a possible public/private partnership, and that this could involve the government providing part of the capital at a low interest rate and standing behind the lender in case
of default.
Handley added: “The government would stand first in line in terms of risk, but the fact it would use public money may be why it won’t happen. At the moment, housing associations go to a bank and raise money on a commercial basis to buy and develop a property and there’s no government funding. This is about a joint venture with lenders to give a better pre-pack of funding for housing associations, rather than them working it out on their own.”
Handley confirmed Truestone had been invited by several housing associations to provide strategic thinking on a solution as to how the government could get into providing funding itself. He said it was possible pilots could begin soon.
Rachel Snow, head of external affairs for the Building Societies Association, commented: “Any scheme where the government takes on greater risk for finance would make it easier for lenders to get involved. If the risk of default is partly mitigated by the government, it would be more attractive for lenders.”
