Government opens for bids for £3.5bn affordable housing guarantees

Under the affordable housing guarantee scheme, the Government will guarantee £3.5bn of debt which will be lent to housing associations to build new affordable homes for rent. The Department for Communities and Local Government (DCLG) said in a statement that, combined with £450 million of Government grants, the scheme is expected to deliver 30,000 homes.

Another scheme, due to open shortly, will see the Government offer £3.5bn of guarantees to housing providers to deliver large scale housing developments for private rent. The DCLG said the scheme aims to encourage investment in such schemes by enabling institutional investors to borrow money at more affordable rates.

The schemes are part of a £10bn loan guarantee under which the remaining £3bn will be allocated to either scheme depending on demand.

"The £10 billion Housing Guarantees Schemes are now open for business, with a groundbreaking new offer of low-cost lending to get spades in the ground, create new jobs and deliver thousands of new homes specifically for rent," said Prisk.

"With the government’s backing, investors can now unlock billions of pounds to build high quality homes for private and affordable rent. These changes offer a greater choice for new tenants across the country," he said.

"Providing good quality, affordable housing for rent is essential to rebuild our economy after the heart attack it suffered in 2008, which made it harder to buy a first home and put more pressure on the private rental market," said Deputy Prime Minister Nick Clegg.

"As well as building more affordable homes, the schemes we are launching today will mean more jobs in construction including apprentices - giving a much-needed jobs boost across the country," he added.