Bank is also close to launching financing scheme for retrofit
Lloyds Banking Group is looking to identify pilot schemes for new social housing financing models “over the next few weeks”, according to its head of housing.
The bank launched the Social Housing Initiative (SHI) in 2023 to convene chief executives and leaders from finance, housing, public and third sector to look at issues facing the sector.
In July, it announced its plans to convert old data and office sites into social housing and published its Building Futures white paper, which included a proposed new method of financing development, which it called the Social Housing Contract.
This would provide an extra payment to housing providers delivering social rent homes by redirecting public subsidy from housing benefits.
On a panel at the Housing Community Summit, David Cleary, Lloyds’ managing director and head of housing, was asked whether the Social Housing Initiative was “gaining traction with the Treasury”.
Cleary said “meetings have been taking place between Treasury officials”, but added that the bank was also working with the National Housing Federation and housing associations in different parts of the country.
“The goal over the next few weeks is to identify specific schemes, specific projects, where we’ll run the financial modelling to accelerate those homes and try and prove it works in practice as well,” he said.
A spokesperson for Lloyds said the contents of the white paper had been “discussed with a number of HAs on how they might be enacted with a view to establishing specific pilots”, but insisted these were currently “exploratory” conversations.
Cleary also said Lloyds was “very, very close” to announcing a retrofit scheme, partly backed by the UK Infrastructure Bank, which will enable a much lower cost of finance on an unsecured for energy efficiency improvement.
“The government is using its balance sheet or its guarantee scheme to enable us to lower the cost of capital to lend it more cheaply to the sector,” he said.
“So, we’re weeks away from that on my side”.
Priya Nair, chief executive of The Housing Finance Corporation, who was also speaking on the panel told Cleary that her organisation was “probably not far behind you on that”, but that it would be focused on delivering retrofit “through institutional investment, given that’s our model.”
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