A consultant is to call on housing associations to give tenants property loans.
Rachel Terry, specialist consultant at Hacas Exchequer, will propose the idea at the National Housing Federation finance conference next Friday. She will ask for associations willing to test out the idea and says a pilot could start with £100,000.

She will suggest associations invest surpluses made from shared-ownership schemes in a loans fund, which would be topped up with investment from banks.

The money would be used for home improvement loans, for tenants to buy equity in their homes and as loans for tenants to put towards buying a house.

The scheme will draw more private investment into the sector and expand the market for the three types of loan.

She said: "If you have a property market that goes up, the private finance would service itself. In a collapse, their money would be a buffer but I cannot see that [a collapse] in the areas of the country where there is a shortage of housing. You could not do it with bank finance alone because they would be worried about values going down."

Using association funds would reduce the risk to the banks, Terry said.

Source

Housing Today