South Lakes nets £25m as NatWest ups affordable housing support
A busy day for NatWest: the bank has a launched a national £250m Section 106 Loan Fund and has also committed to a multi-million-pound loan to the Kendal-headquartered housing association to support the building of 253 affordable rental homes.
Section 106 Loan Fund
NatWest’s £250m Section 106 Loan Fund will offer loans at discounted margins and fees to help registered providers acquire the affordable homes that housebuilders are required to build through Section 106 agreements.
The programme matches the £250m committed to S106 acquisitions by Homes England as part of the National Housing Bank’s £2.5bn low-cost loan programme. The NatWest fund will enable registered providers to effectively double their award from the Homes England programme, as only those with a successful low-cost loan bid will be eligible for it.
NatWest estimates that the cumulative £500m S106 loan pot will enable the purchase of 2,500 homes.
“In February, we set out a £10 billion ambition to support the delivery and maintenance of social housing across the UK,” said Paul Eyre, head of residential and housing finance at NatWest.
“This new £250m S106 Loan Fund is a practical example of that commitment in action — helping housing associations in England unlock sites, bring affordable homes into use and support wider housing delivery at a critical time.”
Housing secretary Steve Reed added: “Housebuilding is a national mission and businesses like NatWest will have a pivotal role to play in helping us unlock stalled housing sites across the country and build the homes we need.”
South Lakes Housing Association
South Lakes Housing Association has worked with NatWest for the past decade, with the bank providing a total of £65m in funding support – a number that includes this latest £25m loan.
This loan will go towards meeting ambitions to build more than 250 homes within the boundaries of the Lake District National Park, Yorkshire Dales National Park, Lancaster and the Lune Valley, and Westmorland and Furness.
South Lakes currently owns 3,800 properties in a 1,000 square-mile radius of its Kendal headquarters. Of those, 86% have an EPC rating of C, with the rest due to follow before the end of 2029 as part of South Lakes’ retrofit strategy.
“This £25m NatWest loan gives us the certainty to keep doing what matters most: building more affordable homes and investing in the quality and energy efficiency of the homes we already manage,” said Tony Cox, the housing association’s director of finance.
“We work across a large rural patch where good quality, affordable housing is hard to come by,” he continued. “Long-term funding like this is also a vote in support of our future plans, helping us deliver our development programme and improve existing homes so residents can live in greater comfort with lower energy bills.”
NatWest and the North
The two announcements are part of a wider investment by NatWest into development. Last month, the bank committed to investing £20bn in the North over the next 10 years, supporting the delivery of housing and infrastructure. Read more.
