The social housing lender has taken out a £10m loan with HBOS, which it will pass on to customers. Much of the cash will go to existing customers borrowing more money.
The loan comes after THFC changed its rules to encourage existing customers to borrow more. Customers who have excess security on loans can now use it to take out extra loans (HT 30 January, page 15). THFC made the change because increased property value and rental income could mean borrowers had more assets secured on loans than necessary.
Chief executive Piers Williamson said: "We did some technical changes that allowed us to share security if borrowers borrowed from us on more than one occasion and had security compartmentalised around individual borrowing. Now we have done that we can put in the funding.
"This deal is aimed at optimising the use of security already pledged to THFC but is part of a bigger campaign to say we are back on the map. We have signed up the first association, although I will not say who it is, and we have a number of others in reasonably advanced discussions."
THFC is also looking to expand the types of housing projects it lends to. Williamson said: "We are looking at lending to different types of social housing other than just rental."
Housing associations welcomed the news that another lender was to become active again. The sector has a small pool of lenders and has lost several players in recent years.
Bob Wilson, finance policy officer at National Housing Federation, said: "It's a good sign and we would be fully supportive. It's almost adding more players directly or indirectly into the market."
Source
Housing Today
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