Warrington lends housing association £20m
WARRINGTON Borough Council is to lend £20m to housing association Plus Dane Group to build affordable homes in the town.
The latest loan, which will cover the cost of 100 new homes in the borough, takes Warrington’s total lending to housing associations in the last four years to £160m.
It follows a £90m loan to St Helens-based Helena Partnerships in January which was set up in 2002 to take over the housing stock of St Helens Council.
Last year the council loaned £30m to Chester-based Muir Group Housing and £10m each to Arena Housing Association and Warrington Housing Association in 2010.
In 2010 the council borrowed the money from the Public Works Loan Board (PWLB) and charged 1.25% on top. The latest round of lending is also expected to come from the PWLB but the terms were not disclosed.
The council’s executive board member for finance, Russ Bowden, said: “This deal gives the council the opportunity to stimulate housing growth, to help deal with the shortage of housing.
“But it will also help economic regeneration in the borough. Evidence shows that house building is crucial for economic growth. Housing has a direct impact on economic output, averaging 3% of GDP in the last decade. For every new home built, up to two new jobs are created for a year.”
He added: “The council will earn an arrangement fee as well as interest revenue. It will also generate additional income for the council in the form of the New Homes Bonus. This extra income can be invested into vital council services, which is really important in this time of austerity.”
Liverpool-based Plus Dane Group manages around 18,000 homes in Cheshire and Merseyside, with 300 in Warrington.