Councillors have approved the launch of a £6 million loan fund which will help to build more affordable homes across South Lakeland.
The loan facility will enable housing associations to access low rate finance from South Lakeland District Council (SLDC) and remove an obstacle which may be preventing them from developing more housing in the area.
In exchange the council will receive a financial return from repayment of the loans and fulfil its pledge to work with partners to deliver affordable homes which local communities need.
A spokesperson for SLDC said: “This is a win for residents who need homes they can afford, a win for housing associations, a win for council tax payers because this is efficient use of money the council already has and it’s a win for the local economy because house building stimulates economic growth.”
Cabinet heard how the innovative loan facility highlights the council’s ambitions to deliver homes to meet local need.
SLDC will initially allocate a maximum of £6 million to the loan fund, from existing and projected housing resources. It is estimated that funding would support the delivery of 48 new affordable homes.
If the first funding projects are successful the council may consider increasing the loan fund to £15 million.
The facility will allow housing associations to draw down money on a scheme-by-scheme basis.
The council’s primary partner, South Lakes Housing, says the loan fund will have a positive impact.
Cath Purdy, Chief Executive of South Lakes Housing, said: “Increasing the number of new affordable homes in the area is a key priority for South Lakes Housing. By working in partnership with SLDC, this funding will unlock schemes which may otherwise not have been possible and provide much needed homes for local people.”
The creation of the new loan fund followed a council-commissioned study which identified the need for more creative approaches to delivering affordable housing.
SLDC is on target to assist in the creation of 1,000 new affordable homes for rent by 2025.
A Strategic Housing Market Assessment concluded that up to 320 new homes need to be built every year across South Lakeland, of which up to 290 new properties are required annually in SLDC’s planning area outside the Lake District National Park.
SLDC will continue to encourage the development of affordable housing through all means of delivery, including open market housing through private sector development.