Question to the Ministry of Housing, Communities and Local Government:

To ask the Secretary of State for Communities and Local Government, how much of his £10 billion for housing guarantees schemes has now been paid to house builders; and how many homes have been completed.

The Government guarantee schemes do not involve the direct payment of funds. Instead, the Government guarantees the borrowing of approved housing providers in order to reduce the risk for lenders and therefore the risk for investors in lending to house builders. This lower risk leads to borrowers paying a lower interest rate and the schemes enable them to access more finance. As this finance is also cheaper, it leaves more money for the house builders in the schemes to plough back into house building.

There are two housing guarantee schemes: one to support the delivery of additional affordable homes, and one to support the delivery of large scale professionally managed purpose built accommodation for private rent. Both schemes run to 2016.

The Government will guarantee up to £10 billion of housing providers’ debt through the two schemes: up to £3.5 billion of guaranteed debt is available for affordable housing, up to £3.5 billion of guaranteed debt is available for the private rented sector and up to £3 billion of guarantee capacity is held in reserve. The debt on both schemes is to be raised primarily through a delivery partner. The debt can be in the form of loans, through the European Infrastructure Fund, or through bond issuance.

Under the Affordable Housing Guarantee Scheme, the Government has so far announced commitments to guarantee £633 million worth of debt for 16 housing providers, which together are expected to deliver 5,900 additional affordable homes.

On 30 May 2014, the first bond of the affordable housing guarantees scheme was issued by our delivery partner, Affordable Housing Finance backed by a full faith guarantee from Department for Communities and Local Government. With Government backing, this bond achieved the lowest price for debt in the affordable housing sector’s history and supported £208 million of the £633 million of approved borrowing. We are considering further proposals for credit and expect to announce further additional borrowers shortly.

Under the Private Rented Sector Guarantee scheme, the Government has been procuring a delivery partner and has been actively engaging with large borrowers interested in the scheme. We expect that a delivery partner when appointed will significantly increase access to the scheme and maximise the number of new build homes for private rent. We will be making further announcements on this scheme in due course.

In addition to this, the Build to Rent Fund provides development phase finance to large-scale private rented sector developments, delivering up to 10,000 new homes for private rent and demonstrating the viability of developing and investing in private rented sector developments. Eleven deals have so far been announced to date worth £151 million, which will deliver approximately 2,000 new homes for private rent. More schemes will be announced in due course.

Such institutional investment in private sector accommodation is dependent on an environment which is free of excessive regulation. Disproportionate regulation on the private rented sector, which this Government opposes, would discourage and undermine such private investment in new homes.