£500 million retrofit boost from the National Wealth Fund (NWF) and Nat West bank
The UK government’s National Wealth Fund (NWF) and NatWest Group have unveiled a £500 million financing initiative to accelerate retrofit upgrades in social housing. The collaboration will see NatWest provide loans of up to £500 million to registered housing providers, backed by an 80% financial guarantee from the NWF, capping its commitment at £400 million.
Who are the National Wealth Fund?
The National Wealth Fund (NWF) is a UK government initiative designed to drive long-term investment in the country’s transition to Net Zero. Launched as part of a broader effort to encourage economic growth post-pandemic, the fund “mobilises” private sector money into public sectors that are critical to achieving net zero — including clean energy, green technology, and housing.
In the retrofit sector, the NWF plays a crucial role in unlocking private finance. By offering financial guarantees on loans, the fund reduces the risk for lenders, making it more attractive for those in the social housing market to invest in large-scale retrofit projects. This approach helps to bridge the funding gap that has long hindered progress in upgrading the UK’s ageing housing stock.
What is the Warm Homes Plan?
The government’s Warm Homes Plan aims to upgrade five million homes over the next five years. This ambitious target will be achieved through the introduction and expansion of funding schemes and grants, alongside working with combined authorities, local councils, and devolved governments to deliver home improvement measures such as insulation, solar panels, and low-carbon heating systems.
As part of the Warm Homes Plan, last month, Government announced their allocation of £1.29 billion under the Warm Homes: Social Housing Fund (WH:SHF) Wave 3 to local authorities and social housing providers in order to retrofit properties across England.
The funding now being released by the National Wealth Fund (NWF) and NatWest Group complements the government’s broader Warm Homes Plan, and is another welcome boost to accelerate retrofit improvements.
How will the loans work?
The loans will allow registered providers to capitalise on funds from the private sector to offer improvements to their social housing stock. Retrofit measures eligible for the funding include energy-efficient heating systems, insulation, solar panels, ventilation upgrades, and biodiversity improvements. Loans will be offered through NatWest, Royal Bank of Scotland, and Ulster Bank, with unsecured terms extending up to 15 years.
The National Wealth Fund (NWF) has confirmed that this latest guarantee brings its total support for social housing retrofit projects to £1.3 billion since October 2023. Recent commitments include loan guarantees of £350 million for Barclays UK Corporate Bank, £400 million for Lloyds Banking Group, and £150 million for The Housing Finance Corporation (THFC).
Why is this type of investment important?
Retrofit Scheme Manager, Steven Marriott comments on the importance of this funding:
‘This is a great push from the private sector into retrofit, providing greater funding opportunities across the board for the social housing sector. Helping those people who live in fuel poverty is vital, particularly under our current climate of expensive gas and electricity cost. The initiative aligns with the UK’s push to meet Net Zero by 2050 and to reduce fuel poverty, targeting key upgrades to improve housing quality and affordability nationwide.”