RSL loans hit £6.7bn

5 Apr 07
Housing associations are continuing to increase the amount of money they borrow from private lenders, according to the Housing Corporation's annual review of private finance.

06 April 2007

Housing associations are continuing to increase the amount of money they borrow from private lenders, according to the Housing Corporation's annual review of private finance.

Loans worth £6.7bn were raised by registered social landlords during 2005/06 – up from £6.3bn the previous year.

Since RSLs were allowed to borrow from private lenders in the late 1980s, they have raised £38.7bn, the report shows.

It also warns that while there are no signs that the appetite of lenders to work with the sector is declining, larger RSLs might come up against the borrowing limits of individual lenders.

The report comes as the corporation is urging associations to increase borrowing so that it can reduce the proportion of new housing financed through grants.

However, Neil Griffith, research leader at the National Housing Federation, said that while RSLs are keen to raise private finance, not all want to use their extra borrowing capacity to build homes.

'If the corporation's proposals are followed through, it would use up all the spare capacity very quickly,' he said.

PFapr2007

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