National Wealth Fund hopes to launch fourth housing sector partnership next week
The National Wealth Fund (NWF) hopes to launch its fourth partnership in the sector next week, a director at the Treasury-backed body has revealed.
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This follow partnerships with Barclays UK Corporate Bank, Lloyds Banking Group and The Housing Finance Corporation (THFC).
Speaking at the National Housing Federation’s Housing Finance Conference on Wednesday (19 March), Jeremy Barker, director in banking and investments at the NWF, said that the body also has “others in the pipeline”. But the NWF, which was formerly known as the UK Infrastructure Bank (UKIB), will “probably have a hiatus” on this type of product after the next partnership announcement, he added.
“We’re trying to stimulate the market to be a catalyst to get more retrofit done, and that has wider benefits in terms of improving skills and learning the lessons,” Mr Barker said during a panel session at the conference.
“So that’s why we’ve got money out there. We’ve done three, we’ve got another one that we hope to sign next week.
“We’ve got others in the pipeline, but we’ll probably have a hiatus after next week, because at the moment, there’s a product out there, but it’s not yet clear to us how popular and how useful that is for the market, and we’d look a bit silly if we did another billion-and-a-half of lending when no one wanted the product.
“Anecdotally, lots of people do want the product – so get it while it’s there – but we want to just check that before we do the next wave.”
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The NWF, which is wholly owned and backed by the Treasury, but operationally independent, has £27.8bn of finance to help crowd in private investment and drive growth across the UK. Yesterday (19 March), the chancellor set out a statement of strategic priorities for the organisation, including an expected commitment of £5.8bn within “carbon capture, green hydrogen, gigafactories, ports and green steel” over the course of the current parliament.
Mr Barker said that the NWF has currently lent somewhere between £4bn and £5bn across all sectors and £1.5bn in retrofitting social housing.
“We’re definitely not full, so we will do more,” he said.
“We’ve got one next week. We will talk to others, but we will have a little bit of a hiatus, I think, on this particular product.”
Mike Figg, head of social housing at Barclays, which is providing £500m to support the sector’s retrofit efforts backed by NWF guarantees, said the bank has a “strong pipeline” of deals with the NWF for the sector.
“And my ambition is to be bothering Jeremy to say, ‘please, can I have some more’ during the course of this year,” he said during the same panel session.
The NWF’s first partnership to support funding towards retrofit efforts in the sector was in October last year when it partnered with Barclays and Lloyds.
Barclays and Lloyds will each deliver £500m of lending to the sector, enabled by financial guarantees of up to £750m provided by the NWF.
The NWF has also partnered with THFC.
As announced earlier this month, specialist pensions insurer Rothesay committed to providing THFC with the initial £150m investment to launch the housing aggregator’s new retrofit funding scheme, supported by the NWF’s financial guarantee.
At the time, the NWF said the scheme unlocks long-term unsecured capital for registered providers at pricing usually reserved for secured lending.
In March last year, UKIB said it was looking at “direct lending” opportunities to housing associations to fund retrofit projects and the potential for a third-party-managed fund to make loans below its minimum threshold to smaller borrowers.
The National Housing Federation has previously warned that the total sum of decarbonising housing association stock could rise to at least £36bn to meet the government’s net zero 2050 target.
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