Warrington approves £80m housing association loan facilities
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Warrington Borough Council has approved £80m of loans to provide borrowing facilities to two housing associations for house-building in the area.
The council’s executive board this week agreed a five-year £50m extension to the five-year loan facility available to association Places for People (PfP), on top of £50m agreed in July 2017.
In addition, it approved a 25-year, fully secured £30m loan facility with Irwell Valley Housing Association.
Danny Mather, head of corporate finance at the authority said: “The two loans support the building of affordable housing.
“They are on full commercial terms and both housing associations have been subject to an independent credit assessment benchmark to the market in setting the loan terms.’’
The PfP loan will be fully funded from prudential borrowing, while the Irwell Valley facility comes from the council’s three-year capital programme, agreed by full council in February 2019.
On-lending to the associations at a commercial rate will also provide a financial return to the council to be used on service spending.
PfP is a large housing association based in Preston, which owns 160 properties in Warrington and 422 in the rest of Cheshire.
The loan was agreed after financial adviser TradeRisks carried out an independent due diligence exercise on the association.
A report by council officers outlined the governance arrangements surrounding the loans made to it by the council.
These include regular monitoring by the council’s treasury management team.
Quarterly loan updates will be given to Warrington’s audit and corporate governance committee in treasury management monitoring reports.
Six-monthly updates will be made to full council via the treasury management strategy report and treasury management mid-year update report.
Monthly loan update reports will be given to the corporate services departmental management team and senior management team.
The council has been providing loan facilities to housing associations to stimulate housing development in Warrington and the surrounding area since 2009.
In 2014, it agreed a £90m loan to housing association Helena Partnerships to encourage new affordable housing.
In February, in its capital strategy, the council outlined its reasons for departing from government investment guidance and continuing to borrow to invest in revenue-generating property outside its boundaries.
