What funding routes await borrowers in 2026?

This is in response to market need, which the roadmap states could include build-to-rent, new settlements, regeneration and other uses, as well as building on the Ministry of Housing, Communities and Local Government’s existing guarantees.

The roadmap also suggests the NHB is considering the development of an affordable housing acquisition guarantee to establish new ownership vehicles to buy and operate existing stock and Section 106 homes.

In terms of debt products, the roadmap states that the NHB expects to expand its debt investment capacity to provide flexible and scalable finance, adapted to fit the requirements of housing and regeneration projects.

The roadmap details the intention to build on Homes England’s existing lending to SME developers and long-term infrastructure finance, by offering debt products to cater for different return and risk profiles.

This is to support a wide range of borrowers, with products created to accelerate housing delivery as well as deal with market gaps and expand access to capital.

More information will be provided once the NHB publishes an investment prospectus in early 2026 together with more detail on the funds and products that will be made available to partner organisations in 2026 and 2027. 

The social housing sector has responded positively to the funding announcement, but it remains to be seen whether this will be something ‘new’ or an iteration of an existing framework.

However it is deployed, it is indisputable that the boost in funding is hugely promising and very welcome, although the actual allocation and delivery will impact the extent of change seen within the sector.

National Wealth Fund

The National Wealth Fund is providing £1.3bn in guarantees to unlock an expected £1.65bn in loans to the sector in partnership with Barclays, Lloyds, NatWest and The Housing Finance Corporation, enabling social housing providers to retrofit properties at highly competitive interest rates.

These guarantees are for up to 80 per cent of the loans provided by the partner banks.

The intention is that the loans provided will fund retrofit measures, including the installation of ventilation and heating controls, low carbon lighting and heating, insulation and renewable energy, as well as improving biodiversity and resilience measures.

They can include discounted interest margins and come without an arrangement fee. It is anticipated that the discount in fees and margin on these products when fully deployed could save the housing association sector up to millions of pounds in funding costs.

These can instead be used to invest in other things, for example, in new social rent homes.

The intention is that the loans provided will help housing association borrowers speed up decarbonisation of their existing housing stock, reduce energy consumption and emissions with the corresponding aim of improving quality of life for residents and creating green jobs in the process.

Given the challenges of decarbonisation with limited access to capital faced by housing associations, we expect further uptake of these new purpose-based products to fund these requirements throughout 2026. This follows recent transactions by registered providers (RPs) such as Peabody, Sovereign Network Group and Vivid over 2025.

Affordable Homes Guarantee Scheme

Venn is authorised by the UK government to provide the Affordable Homes Guarantee Scheme (AHGS). The scheme comprises long-term loans of up to 30 years to RPs developing new affordable homes in England.

The total for the AHGS was £6bn, having started as a £3bn commitment and subsequently topped up with a further £3bn by the government, but now only £3bn remains.

This is through loans funded by Saltaire Finance issuing public bonds benefitting from a UK government guarantee.

Given that the loans use precedent documentation tailored for the sector with the added benefit of long dated maturities, we expect to see continued uptake of these up until the deadline of 30 April 2028.

This is because of the requirement under the documentation for borrowers to develop new affordable homes and invest in existing homes for an amount corresponding to the amount borrowed under the scheme, with terms able to be agreed quickly between approved borrowers and Saltaire.

A return to debt capital markets?

It was hoped that 2025 would see a wider return to the debt capital markets in the social housing sector, but in reality uptake was more limited due to wider macro-economic uncertainty (largely for geopolitical reasons and a still volatile interest rate environment).

Instead, RPs seemed to favour more medium to long-term loan products, and we may see that trend continue into the new year, as shorter-term revolving facilities taken out during the COVID-19 pandemic reach maturity and RPs seek to manage their refinance risk.  

However, as interest rates slowly fall and start to stabilise, RPs may have the confidence to look at public bonds and private placements as an option for longer-term financing.

Institutional investors in these products seek to diversify their investments, with housing association issuers perceived as a safe and stable proposition.

Rebecca Jason, partner, and Rosanagh Herries, senior associate, Winckworth Sherwood