NatWest, Britain’s biggest bank for business, has announced the expansion of its ringfenced social rent loan fund from £500m to £1bn to accelerate the delivery of homes for social rent across the country.
Social rent homes are designed to provide affordable housing for people on lower incomes and let to tenants at significantly lower than private market rates.
The investment follows significant demand from housing associations and demonstrates the bank’s continued £7.5bn ambition to supporting the urgent need for affordable housing for 1.3 million people on social housing waiting lists.
Eligible housing associations which are existing customers of the bank can apply for the social rent loans which are incentivised with discounted interest margins plus no arrangement fee.
The aim of providing discounted loans for building social rent homes will not only support their construction but also enable housing associations to allocate funds towards improving living conditions within the communities they serve.
The Government has pledged to stop children growing up in B&Bs as part of its child poverty strategy. In England alone, more than 172,000 children are living in temporary accommodation.
Paul Thwaite, CEO, NatWest Group, said: “Investing in safe, warm, and affordable housing for families isn’t just about shelter but an important investment in the long-term well-being, education, and economic prospects of children and their parents. With more than 1.3 million households still on social housing waiting lists, and 145,000 children without the security of a stable home, NatWest is committed to the role we can play in supporting the UK social housing sector in any way possible.
“This is why we have pledged to increase our social loan offering to £1bn for our customers to help them build vitally needed social rental properties across the UK as part of our £7.5bn lending ambition to the social housing sector.”
VIVID was one of the first housing associations to draw funds from NatWest’s social rent loan fund, securing £100m to build an additional 450 new social rent homes across the south of England.
Bromford Flagship has also recently secured £50m to fund the development of over 470 new homes for social rent across east, central and the south west of England.
David Ball, Chief Financial Officer at VIVID, commented: “NatWest’s new social rent linked loan product gives housing associations the financial flexibility to build more homes at social rent levels. The overall rate discount being offered is an innovative step change that shows NatWest’s commitment to supporting the Government’s Social Rent led agenda.”
Paul Walsh, Chief Finance Officer at Bromford Flagship, added: “NatWest has been a key strategic funding partner of ours for several years and this deal underlines the strength of their long-term support for us and our sector. The social aspects of this loan clearly demonstrate the alignment of our organisations’ values and strategic objectives. This type of innovative funding structure helps us to deliver much-needed new homes for social rent, the most affordable tenure, whilst continuing to invest heavily in our existing homes and deliver high quality services to customers.”
According to a 2024 report from Shelter and the National Housing Federation, social homes are more stable than private renting, as tenancies are secure, leading to better socioeconomic outcomes and increasing rates of employment.
In England, housing associations have expanded their affordable rent development programmes, as these generate rents of up to 80% of market rates, in contrast to social rent, which typically yield rents of approximately 50% of market rates.
Header image: NatWest Group CEO Paul Thwaite (copyright Adam Hollingworth/NatWest Group)
Sources
Social housing lettings in England, tenants: April 2023 to March 2024 – GOV.UK and Youth Homelessness – Hansard – UK Parliament
National Housing Federation – Let’s fix the housing crisis
Affordable housing in England
