Accord agrees £60m loan for BME housing in the Midlands

West Midlands-based Accord Housing Association has signed a £60m loan with the Royal Bank of Scotland.

The deal includes a £10m unsecured, revolving facility, which the association will use to buy sites for its land bank. This facility allows Accord to borrow the money, repay it and then borrow it again. Such deals are cheaper than taking out a second loan.

Of the remaining £50m of secured funding, £21m will be used to refinance existing debt with Nationwide, and £29m will be used to fund Accord’s development programme.

Accord is aiming to build 500 homes a year for the next two to three years. One-third of the homes will be for general needs, one-third will be supported housing, and one-third will be for families from black and minority-ethnic communities. Accord’s subsidiary Ashram Housing Association specialises in providing homes for people from BME backgrounds.

Lakhbir Jaspal, Accord’s director of resources, said: “There is a huge need for housing in the region’s BME community.”

He added that the £10m of unsecured funding was needed to bolster Accord’s case to join the Housing Corporation’s list of elite development partners next year.

“It’s important we have an 18-month pipeline of development,” he said.

Jaspal said banks were expected to start providing an increasing number of unsecured loans to housing associations. Under the terms of an unsecured loan, housing associations do not have to put up property as security. Such deals increase the speed in which associations can access the money.

Jaspal said: “The market is moving in the direction of unsecured loans. Over the last few years, banks have become more comfortable with providing unsecured loans to the housing sector.

“The unsecured loan is a show of support for the association and proves we have a strong balance sheet. This is the first we’ve done and I expect to see this happening more and more.”