NatWest launches £250m fund to support housing associations in acquiring affordable homes

NatWest has launched a £250m loan fund to help housing associations to acquire affordable homes from housebuilders.

The Section 106 Loan Fund is set to build on NatWest's wider commitment to the social housing sector, following its recent announcement of a new £10bn funding ambition for UK social housing by the end of 2028, taking total support for the sector to more than £35bn since 2018. 

Section 106 homes are affordable properties constructed by housebuilders as part of planning agreements with local authorities. 

The new NatWest fund matches the £250m of funding recently announced by Homes England as part of its £2.5bn low-cost loan programme, increasing total funding available for S106 acquisitions to £500m. 

The fund will be available to existing housing association customers that are successful in securing S106 Low Cost Loan, which is expected to double their capacity to purchase S106 homes.   Together, this funding could support the acquisition of about 2,500 S106 homes, while facilitating thousands more homes for market sale.

Paul Eyre, head of residential and housing finance, NatWest, said: "In February, we set out a £10bn ambition to support the delivery and maintenance of social housing across the UK. This new £250m S106 Loan Fund is a practical example of that commitment in action — helping housing associations in England unlock sites, bring affordable homes into use and support wider housing delivery at a critical time."

Neil Jefferson, chief executive at the Home Builders Federation, added: "With around half of affordable housing being delivered through the Section 106 cross-subsidy model, it is important that we have a functioning market for these much-needed affordable homes. Without registered providers to take on these homes, we're seeing overall housing supply slow or halt entirely. 

"Moves to unblock the market and encourage Registered Providers to acquire homes already subsidised by private subsidy are very welcome and will help to boost the supply of both affordable and private homes."