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REaLM Fund….long term funding?

20/03/2011 09:00

This funding is particularly significant as it comes at a time when it is increasingly difficult to secure money from banks to provide much needed affordable housing.   Banks are increasingly unwilling to lend long term and with shorter term funds (5-7yrs), the more regular the re-pricing of funds, which all adds to cost so a long term option is very attractive to borrowers.   Now we have a viable and attractively priced option with the REaLM fund and more importantly, this type of funding can fill the hole left by banks for long-term finance (40-60yrs).   Being able to secure long term investment will allow HARP’s and Local Authorities a base on which to start new development programmes…which gets Britain building again.

This is a new source of long-term funding without imposing financial covenants.   This finance opens up the possibility of attracting a different source of long-term funding to the banks and bond markets.   This funding could be used to refinance existing stock and release capital for development programmes.

The nature of the pension fund investment ideally compliments the requirements of affordable housing with its index linked secure income stream.

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