NatWest Group has announced a new package of targeted lending and support for UK social housing, aimed at supporting local housing authorities and homeowners alike in the face of ongoing economic pressures.

Through a new ambition of £5billion of lending (New funding gross of repayments and amortizations) over three years from 1 January 2024 to year-end 2026, the bank is aiming to support the delivery and maintenance of social housing in the UK, which is vital to the people and families who rely on affordable housing, as well as the wider economy.

According to a recent report by Centre for Economics and Business Research Cebr, National Housing Federation and Shelter, social homes are more stable than private renting, as tenancies are secure, leading to better socioeconomic outcomes and increasing rates of employment. The report also found that in 2023 there was a net loss of nearly 12,000 social homes, while 1.3million households are on a waiting list in England.

This lending should help the housing associations sector to deliver a pipeline of new homes and improve living conditions in existing properties, thus improving the availability and quality of social housing in the UK. Alongside the construction of new properties, this lending could also help housing associations finance energy efficiency and environmental solutions, such as retrofits.

Robert Begbie, CEO, Commercial & Institutional Banking, NatWest Group said:

“We are proud to be a major lender to the UK social housing sector, which continues to deal with multiple priorities such as the demand for new and upgraded housing, and the critical challenges of energy efficiency, fire and tenant safety.

In 2023, we completed nearly £3bn of new funding to help more people and families have access to housing. We support around 200 housing associations across the UK, and are proud to announce our ambition to provide a further £5 billion in funding to support the housing association sector by the end of 2026.”

£5bn for social housing

Today’s announcement is the bank’s latest signal of support to the housing association sector. In February 2021, the bank issued a €1 billion affordable housing social bond, the first of its kind by a UK bank, using the bond proceeds to finance or refinance loans to not-for-profit registered housing associations operating in the UK.

NatWest Group has also helped deliver for the sector across the UK: under its Ulster Bank brand in Northern Ireland, the bank recently concluded a lending transaction of £70m for social housing developer Choice Housing, with the developer planning to deliver nearly 1,000 new homes across Northern Ireland.

In Scotland, the bank delivered a £96million loan to Aberdeen-based Grampian Housing Association (GHA) to finance the development of 1,000 new sustainable homes in the region. The loan provides GHA with the necessary flexibility to continue supporting its communities and tenants, where it currently provides services to over 4,000 households.

Homewards

The bank has deepened its work with The Royal Foundation’s Homewards programme, whose aim is to prevent and end homelessness. The programme has identified the need to unlock more housing, and an important element of that is increased lending from bank focussed on social housing. With collaboration at the centre of Homewards’ mission, NatWest Group is actively engaging with the programme to explore how it can offer support and expertise to help prevent homelessness.

Homewards works in six flagship locations (Bournemouth, Christchurch and Poole, Northern Ireland, Aberdeen, Sheffield and Newport and Lambeth), and through its work with the bank’s Regional Boards across the UK, and at a national level, the bank is exploring a response, in a collective effort to help prevent homelessness in these areas across the next five years.