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NatWest doubles social rent loan fund to £1 billion in response to strong demand

NatWest, Britain’s biggest bank for business, has announced the expansion of its ringfenced social rent loan fund from £500m to £1 billion to accelerate the delivery of homes for social rent across the country.

  • NatWest increases its pioneering social rent loan fund from £500 million to £1 billion to boost building of social rent homes across the UK
  • The first to market loan has no arrangement fee and discounted interest margins to support housing associations which are already NatWest customers
  • This £1bn loan offering is part of the bank’s ambition to lend £7.5 billion to the social housing sector to year-end 2026
  • The discount in fees and margin on the £1bn when fully deployed could save the housing association sector up to £50 million of finance costs 

 

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 in England alone, 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 £7.5 billion 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 £100 million to build an additional 450 new social rent homes across the south of England.

Bromford Flagship has also recently secured £50 million 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. 

Notes for Editors

Loans will be documented in line with LMA Social Loan Principles

The social loan will be available to housing associations which are existing customers of NatWest Group and meet the applicable eligibility criteria

 

Terminology and Context:

Social rent is approximately 50% of local market rent. Affordable rent is up to 80% of local market rent. Source:  Affordable housing in England

In 2024, in England, according to the Regulator of Social Housing, there was a net increase of 700 social rented properties compared to 24,800 affordable rented properties. Source: Social landlords continue to build new homes, according to RSH statistics - GOV.UK

¹Sources: Social housing lettings in England, tenants: April 2023 to March 2024 - GOV.UK and Youth Homelessness - Hansard - UK Parliament

²Source: National Housing Federation - Let’s fix the housing crisis

³Source: Affordable housing in England

About NatWest

NatWest Group serves customers in the UK supporting them with their personal, private, and business banking needs. NatWest helps customers at all stages in their lives, from opening student accounts, to buying their first home, setting up a business, and saving for retirement. Alongside a wide range of banking services, NatWest offers businesses specialist sector knowledge in areas such as manufacturing and technology, as well as access to specialist entrepreneurial support.

 

About VIVID

At VIVID, we’re driven to transform lives by providing over 37,000 homes to people across the south of England. We’re here to ensure that everyone, regardless of their background, has access to a safe, affordable, and welcoming place to call home. Our vision “More homes, bright futures”, recognises that a decent place to call home is the foundation for a bright future. We continue to grow the number of homes we offer.

Our homes are more than just buildings; they’re the springboard for dreams, connections, and futures. We listen to our customers to understand their needs and aspirations, which helps us shape not only the homes we provide but also the services that support them.

With a strong focus on quality, sustainability, and community engagement, we invest in our homes to ensure they’re safe, energy efficient, and enhance the quality of life for our customers. We’re here to create lasting, positive impact in the lives of our customers and communities.

 

About Bromford Flagship

The need for affordable housing and strong housing associations who can deliver it, has never been greater. With over 80,000 homes across east, central and southwest England, and a commitment to deliver a further 2,000 homes each year for the next 30 years, Bromford Flagship has a proven track record and the ability to deliver at scale. It doesn’t end there.

We’re committed to investing significantly to improve our services. Through our locally focused and accountable teams, we tailor our approach to the different people and communities we serve. And by doing things differently, we make the greatest difference.

Streets become places where people want to live and where customers and communities thrive, because of our ‘place standard’. Customer service delivery is improved by our experience, expertise and commitment to technology.

Customers’ priorities drive our decision making and innovation. When people have quality homes and are part of caring communities, anything is possible. Through our scale and commitment, flexibility and investment, experience and imagination, we’re enabling people to thrive.

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