Only a quarter of £10bn guarantees allocated are for affordable housing, says Government

The Government's recently announced £10bn debt guarantee scheme, which was set up to enable housing providers to raise a debt with a Government guarantee and to give assurance to investors, will only provide £2.5bn of guarantees for bonds raised to build affordable homes, according to an Inside Housing report. 

Remaining guarantees are expected to be allocated to house building in the private rented sector.

The Government announced last month that it would invite bids to provide up to an additional 15,000 affordable homes through the use of loan guarantees, asset management flexibilities and capital funding. Scheme participants will need to commit to deliver an agreed number of new affordable homes in exchange for benefiting from the guarantee and other elements.

The Government will appoint two separate bodies to provide the guarantees and there will be separate bids for the affordable and private rented parts of the scheme. It is expected that bids for the scheme will be made by the Housing Finance Corporation as well as several banks, including Royal Bank of Canada, Barclays and Lloyds, the report said.

It is expected that the bidding process will be launched by the Government later in the autumn.