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Loans for developers to build schools alongside new homes
EB News: 10/10/2019 - 09:26
A £20 million fund is being made available to housing developers to build schools alongside new homes.
It means new school places are financed and delivered up-front – rather than builders having to wait for new homes to be built and sold before having the money to build the development. The loan will be charged at interest, and repayable once new homes are sold.
The scheme will incentivise developers to build more properties in the areas most in need – including on sites that have stood empty for a long period of time.
It also helps boost the viability of new housing estates, particularly those led by small and medium sized developers where cashflow is a significant issue.
Education Secretary Gavin Williamson, said: "We know that in some cases, building schools and properties at the same time so they are ready for new communities can be challenging for housing developers. That’s why we are launching these loans today, to help parents secure a good school place for their child at the same time as moving into a new family home."
The Developer Loans for Schools programme will give parents even more choice of a good school place through a pilot, running from 2019 to 2021, in areas that meet specific criteria, including demand for more good school places; an approved application to open a new free school before the loan changes hands; planning permission to build extra homes; Demonstrable value-for-money of the project; Early funding required for the school as part of housing developments; and the borrower must be a UK-registered company and must own the site.
Housing developers are already expected to contribute to the costs of new schools to help meet the need arising from new housing, but can struggle to raise the funds to get schools ready in time for families moving to new developments. The new loans will help plan mixed-used developments – which offer new homeowners an entire community as well as a new home – more effectively.
Developers interested in taking part in the pilot programme can express their interest and submit their project proposals to the Department for Education from October 2019.