NatWest announces the launch of a new £250 million Section 106 Loan Fund, supporting housing associations to acquire affordable homes from housebuilders and helping unlock stalled housing delivery in England.
The announcement builds on NatWest’s wider commitment to the social housing sector, following its recent announcement of a new £10 billion funding ambition for UK social housing by the end of 2028, taking total support for the sector to more than £35 billion since 2018.
Section 106 homes are affordable properties delivered by housebuilders as part of planning agreements with local authorities. In recent years, housing associations have faced increasing financial pressures, reducing their ability to acquire these homes at previous volumes. This has had a knock-on impact across the housing market, with completed homes left vacant and new developments delayed due to uncertainty around S106 sales.
The new NatWest fund matches the £250 million of funding recently announced by Homes England as part of its £2.5 billion low-cost loan programme, increasing total funding available for S106 acquisitions to £500 million. The fund will be available to existing Housing Association customers that are successful in securing S106 Low Cost Loan, which will double their capacity to purchase S106 homes.
Together, this funding could support the acquisition of around 2,500 S106 homes, while facilitating the delivery of thousands more homes for market sale. The loans will be offered at discounted margins and fees.
Paul Eyre, Head of Residential and Housing Finance, NatWest said: “In February, we set out a £10 billion ambition to support the delivery and maintenance of social housing across the UK. This new £250 million 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.”
Housing Secretary Steve Reed said: “We need to build more affordable homes to bring down the number of families stuck on housing waiting lists. Housebuilding is a national mission and businesses like NatWest will have a pivotal role to play in helping us unlock stalled housing sites across the country and build the homes we need.”
Neil Jefferson, CEO, Home Builders Federation said: “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.”
Kate Henderson, National Housing Federation Chief Executive said: “Section 106 is fundamental to ensuring affordable housing remains at the heart of mixed communities across the country. This product is strongly welcome and will support housing associations to continue investing in section 106 homes, as part of the sector’s ambition to deliver a generational boost to social and affordable housing.”
The announcement is part of the bank’s five point Growing Together plan, setting out how the bank will help build the conditions for UK wide growth: backing powerful regions, championing mid-market companies, strengthening the country’s infrastructure and housing foundations, boosting financial confidence amongst families and young people, and supporting the innovators shaping the future economy. Drawing on its regional footprint, expertise and convening power, the bank aims to bring businesses, communities, and policymakers together to tackle structural barriers, unlock productivity and spread opportunity across the UK.
