Investor interest in the new Affordable Homes Guarantee Scheme (AHGS) has exceeded £1bn, Inside Housing can reveal.
ARA Venn, the firm chosen to run the government-backed scheme, said interest from borrowers in England is now over £1bn – a third of the total funding available via the programme.
The AHGS was announced by then-chancellor Philip Hammond in the 2019 Spring Budget with the aim of giving affordable housing providers access to low-interest loans.
Overall, the scheme – in which the government underwrites loans up to a combined value of £3bn – is expected to provide 17,000 new affordable homes over a three-year period.
Oriane Auzanneau, deputy portfolio manager at ARA Venn, said: “It is great to be working with the sector and it is very encouraging to have at this stage already received expressions of interest for funding under the scheme in excess of £1bn, which also demonstrates the sustained commitment from the sector to deliver much-needed additional affordable homes.”
Singapore-based investment manager ARA Venn was selected by government to run the scheme last year. Portfolio manager Richard Green estimated that the scheme will look to issue 30-year bonds at around 40 to 50 basis points over gilts – the government cost of borrowing.
In an interview with Inside Housing last year, Mr Green projected that the first AHGS loans would be issued in quarter two of 2021.
But the most recent update from ARA Venn suggests that the first issuance could be delayed to quarter three.
Ms Auzanneau said: “There has been a positive level of continued engagement, from organisations of various sizes and across England, who are keen to benefit from this opportunity to access long-term funding at an attractive cost, and we anticipate making the first loans under the scheme in the third quarter this year.”
The AGHS will be run by a subsidiary of ARA Venn, Saltaire Housing, whose board includes Mark Prisk, housing minister during the Cameron administration.
The scheme was resurrected following the success of the Affordable Housing Guarantee Programme, run by social housing bond aggregator The Housing Finance Corporation, which regularly offered rates of below 2%.