Warrington to provide social landlords with loans

Michael Hunt

Warrington Borough Council is expected to loan two housing associations £10m each to help start the construction of new homes in the area.

Registered providers of social housing, Warrington Housing Association and Arena Housing Association, are expected to benefit from the council's loans over a five year period.

In a report to the authority's executive board it said "In April 2009 the Executive Board approved the principle of providing loans to RPs to ensure the delivery of affordable housing subject to obtaining Secretary of State approval for the loans and a further report on the financial terms of any loan."

It added: "The Department for Communities and Local Government has advised that in certain circumstances there is a "general consent" for the provision of a loan which would not require the Secretary of State approval."

The report said the economic downturn had caused affordable housing schemes, which should have started on site in 2008 and last year, being delayed.

As a result of this, the report identified that there will be a shortfall of 171 affordable homes being built across the borough each year between 2008 and 2013, compared to a shortfall of 42 between 2001 to 2006.

The report said the council will borrow the cash from the Public Works Loans Board and charge interest of 1.25% over 25 years. The facility will be available for five years and the minimum the associations can borrow is £500,000.

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