NatWest unveils £250 million loan fund to accelerate affordable housing delivery in England
NatWest has introduced a £250 million Section 106 Loan Fund aimed at assisting housing associations in acquiring affordable homes from housebuilders, thereby addressing delays in housing development across England.
This initiative complements NatWest’s broader pledge to the social housing sector, which includes a recent announcement of a £10 billion funding target for UK social housing by the end of 2028. Since 2018, the bank’s total support for the sector has surpassed £35 billion.
Section 106 homes are affordable properties that housebuilders provide under planning agreements with local authorities. However, financial challenges faced by housing associations in recent years have limited their capacity to purchase these homes at previous levels. This has contributed to vacant completed homes and postponed new developments due to uncertainties surrounding Section 106 sales.
The new loan fund matches a £250 million allocation recently announced by Homes England as part of its £2.5 billion low-cost loan programme, effectively doubling the total funding available for Section 106 acquisitions to £500 million. Existing housing association customers who secure the Section 106 Low Cost Loan will be eligible for this fund, which will double their purchasing power for Section 106 homes.
Combined, these funds could enable the acquisition of approximately 2,500 Section 106 homes and facilitate the construction of thousands more homes for market sale. The loans will be provided with discounted margins and fees.
Paul Eyre, Head of Residential and Housing Finance at NatWest, stated: “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 commented: “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 of the Home Builders Federation, added: “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, Chief Executive of the National Housing Federation, 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.”
This announcement forms part of NatWest’s five-point Growing Together plan, which outlines the bank’s strategy to foster UK-wide growth by supporting regional development, mid-market companies, infrastructure and housing foundations, financial confidence among families and young people, and innovation in the economy. Leveraging its regional presence and expertise, NatWest aims to unite businesses, communities, and policymakers to overcome structural barriers, enhance productivity, and expand opportunities across the UK.
