28 June 2002
Proposals contained in the Enterprise Bill currently being debated by MPs would mean that most registered social landlords would face higher borrowing costs and administrative chaos, according to the National Housing Federation.
The federation's main concern is that lenders would impose so-called 'floating charges' over the entire assets of an RSL that has borrowed money in the past or does so in the future. At present, associations have only to provide a proportion of their assets as security.
Although the Department of Trade and Industry has promised consultations before the insolvency rules are extended to RSLs, the NHF claims lenders could introduce the charges as soon as the Bill becomes law.
Liz Potter, the NHF's head of policy, said one government department, in this case the DTI, appeared to be shooting another, the Office of the Deputy Prime Minister, in the foot. 'The DTI is pursuing an agenda to improve British business, but to threaten the government's housing policy in the process seems a particularly blinkered approach,' she said.
PFjun2002
