NatWest launches £250m fund to increase affordable housing

NatWest has announced a £250 million Section 106 Loan Fund to help housing associations buy affordable homes from housebuilders and unlock stalled housing delivery.

Together, this funding could support the acquisition of around 2,500 S106 homes. The loans will be offered at discounted margins and fees.

Section 106 homes are delivered as part of planning agreements with local authorities, but housing associations have recently struggled to acquire them due to rising financial pressures.

This has led to completed homes sitting empty and delays in new housing developments.

NatWest said the fund is part of its wider goal of supporting social housing with £10 billion in funding by the end of 2028.

Paul Eyre, head of residential and housing finance at NatWest, said: “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.”

Supported by a matching £250 million recently announced by Homes England, the fund doubles the total funding available for Section 106 acquisitions to £500 million.

Catherine van Weenen, regional managing director of commercial mid-market at NatWest, said: “Across London and the South East, housing constraints continue to limit opportunity for families and hold back regional growth.

“This £250 million Section 106 Loan Fund is a practical step to help housing associations bring more affordable homes into use and accelerate new delivery.

“This funding supports families, strengthens local economies, and helps ensure growth is more evenly shared.

“It’s a clear example of our Growing Together plan in action – backing the regions, building for the future, and empowering communities in London, the South East and beyond to thrive.”

Support for the scheme has also come from the Government.

Housing Secretary Steve Reed said: “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.”