Stonewater secures EIB approval for £100m loan

Stonewater, one of the UK’s leading social housing providers, has received approval for a £100 million loan from the European Investment Bank (EIB). The loan will finance investments for a four-year period to enable planned improvements to existing housing stock and the building of new affordable housing.

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Stonewater’s already ambitious development plans were accelerated by the announcement in October 2018 of £224m funding from Homes England for a new strategic partnership with Guinness to begin building 4,500 high-quality, affordable homes by 2022. As a result of the additional funding, Stonewater’s revised housebuilding programme now aims to deliver 4,850 new affordable homes over the four-year period starting March 2019.

The loan is part of around £1bn of UK housing association loans that have been in the EU bank’s official approved pipeline for several years. Concerns had been raised over the future of EIB funding in the UK when it leaves the EU, which had led to a lack of progress on loans in 2018.

John Bruton, executive director of finance at Stonewater, said he is “pleased that we have been able to continue to progress this loan as it would be a very beneficial component to the funding of our strategic ambition to increase the number of new homes we build for those in need.”

Mr Bruton said: “Both the EIB and Stonewater would like to complete the loan documentation by 31 March, so that’s what we are working to achieve.”

In 2018-19 Stonewater will have completed 650 new homes at projects like the £4.8 million scheme In Waterlooville of 14 homes for low-cost shared ownership and 40 much-needed affordable homes for local people on the site of a former cake factory in Leamington Spa.

For Stonewater, the EIB has said it expects the project will result in “a significant number of positive social externalities (e.g. provision of affordable accommodation for low-income households etc), justifying the bank’s involvement”.

The project description adds: “Positive social benefits are also foreseen through the improvement in quality of housing for households with below-average income, as well as the provision of space for associated infrastructure facilities.”

The EIB said Stonewater and the rest of the UK social housing sector “are tightly regulated by the government-appointed regulator… which possesses extensive powers of monitoring and intervention”.

The EIB has provided more than £4 billion to UK social housing and urban renewal schemes in the past decade, mainly through debt aggregator The Housing Finance Corporation.