Treasury Confirms Discounts On Council Borrowing For Housing Projects

Councils are offered a discount on borrowing for housing projects from the Public Works Loan Board (PWLB). In October, the Treasury hiked the PWLB rate by one percentage point, with councils fearing a hit to housing plans. But the Budget pitched PWLB as going back to its pre-October rate. And the Treasury is also pitching plans to cut the PWLB interest rate for all borrowing, but only after it has introduced measures to ban councils borrowing to invest in commercial property. A wider consultation on changes to the PWLB is underway, with Government saying that once a “workable system” is designed and implemented, cuts to the interest on all new loans from the PWLB will come. Read more on 24housing.

https://www.24housing.co.uk/news/treasury-confirms-discounts-on-council-borrowing-for-housing-projects/

Budget 2020: Housing Measures At A Glance

·         A new Affordable Homes Programme of £12bn

·         A £1bn Building Safety Fund to remove unsafe cladding from buildings

·         £650m of funding to help rough sleepers into permanent accommodation

·         £400m for ambitious regional mayors to build homes on brownfield sites

·         Promise to announce measures to change the planning system tomorrow

·         A 1% cut on the Public Works Loan Board interest rate, used by local authorities to fund housebuilding

·         A temporary removal of the minimum income floor (which calculates assumed earnings for self-employed people) in Universal Credit as part of the government’s response to coronavirus

·         £200m for communities in areas that repeatedly flood

Read more on Inside Housing.

https://www.insidehousing.co.uk/insight/budget-2020-the-housing-bits-of-sunaks-speech-in-full-65395?utm_source=Ocean%20Media%20Group&utm_medium=email&utm_campaign=11390639_IH-BUDGET-SPECIAL-11-3-2020-GR&dm_i=1HH2,6S52N,8CKJV9,R4PA8,1

PWLB Rates For Social Housing Cut

Chancellor Rishi Sunak has cut interest rates by one percentage point for councils seeking to take out public loans for social housing. The move returns rates for social housing to the level they were at in October before the Treasury announced a surprise one percentage point hike to the cost of borrowing from the Public Works Loan Board (PWLB). Councils will now be able to borrow from the PWLB at 0.8% over gilts for social housing schemes, with authorities in England, Scotland and Wales eligible for the discount. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/pwlb-rates-for-social-housing-cut-to-pre-hike-levels-65392?utm_source=Housing60&utm_medium=email&utm_content=article_link&utm_campaign=H60

Councils Ask For Housing Discounts Following PWLB Rate Rise

Councils have asked the Treasury to offer discounts on public borrowing rates for housing after interest levels were hiked last week. The government told local authorities that it is increasing the cost of new borrowing from the Public Works Loan Board (PWLB) by 1%, bringing the rate to 1.8% over gilts, which sit at around 1%. The move has led to concerns in local authorities across the country that the increase could threaten planned housing and regeneration schemes. Town halls across the country have been putting in place huge borrowing programmes to build new homes after the government abolished the Housing Revenue Account (HRA) debt cap in October last year. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/councils-ask-for-housing-discounts-following-pwlb-rate-rise-63708?utm_source=Housing60&utm_medium=email&utm_content=article_link&utm_campaign=H60

Government Accused Of Wrecking Plans To Build More Social Housing

The government has been accused of “trashing” plans to build more social housing across the UK after it imposed a shock interest rate rise on cheap Treasury loans. Councils reacted with frustration to the one percentage point increase on public works loan board (PWLB) finance, which was imposed “out of the blue” this week, warning it could delay or scupper housebuilding and regeneration schemes. They said rise would lead to fewer council homes being built, and would reduce local authorities’ ability to build and maintain schools, roads and waste facilities, and invest in commercial property. Read more on the Guardian website.

https://www.theguardian.com/society/2019/oct/11/government-accused-wrecking-plans-build-more-social-housing

Council Credit Rating 'Constrained' By HRA Reform

Credit ratings agency Standard & Poor’s has said that it has ‘constrained’ the rating of Birmingham City Council because of additional debt it will take on as a result of the housing revenue account reform. Nevertheless, the agency still gave Birmingham a AA+ rating, the second highest possible, stating that the council’s financial management had a positive effect on its rating. It added that the supportiveness of the UK’s institutional framework helped Birmingham achieve its rating, with liquidity supported by its ability to access the Treasury’s Public Works Loan Board for financing. Meanwhile, a second ratings agency, Moody’s, gave Birmingham the highest possible triple A rating. Read more on Inside Housing.

Treasury Cuts Loan Rates To Aid Councils Moving To Self-Financing

Chief Secretary to the Treasury Danny Alexander has cut the interest rate offered to stock-holding councils to borrow cash from the Government-backed Public Works Loan Board (PWLB) in a bid to support their transition to self financing. Earlier this month, Wandsworth Council announced plans to snub the PWLB and issue a £250m bond to pay the debt it will inherit which is close to £500m. It said the rates available from the markets are better than the "higher interest rates" offered by the PWLB - which has been the traditional way councils have raised finances. Mr Alexander said yesterday: "To support local growth, I can today announce my decision to reduce the interest rate offered to local authorities by the Public Works Loan Board to finance the £13bn of debt needed to leave the Housing Revenue Account subsidy system. Read more on 24dash.