NatWest has announced the launch of a new £250 million Section 106 Loan Fund aimed at helping housing associations acquire affordable homes from housebuilders and unblocking delayed housing projects across England.

The initiative expands upon NatWest's broader commitment to the social housing sector, following its recent pledge to provide £10 billion in funding for UK social housing by the end of 2028. This brings the bank's total support for the sector to over £35 billion since 2018.

Section 106 homes are affordable properties built by developers as a condition of planning agreements with local authorities. Mounting financial pressures on housing associations in recent years have limited their capacity to purchase these properties at historical volumes. Consequently, this has created a ripple effect across the wider housing market, leaving completed homes empty and delaying new developments due to uncertainty surrounding Section 106 sales.

This new fund from NatWest matches a £250 million funding allocation recently announced by Homes England under its £2.5 billion low-cost loan programme, bringing the total funding available for Section 106 acquisitions to £500 million. The fund is accessible to existing housing association customers that successfully secure a Section 106 Low Cost Loan, effectively doubling their capacity to buy Section 106 properties.

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Combined, this funding package could support the acquisition of approximately 2,500 Section 106 homes, while simultaneously enabling the delivery of thousands of additional homes for the private market. The loans are set to be offered with discounted margins and fees.

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."

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, said: "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. Without Registered Providers to take on these homes, we're seeing overall housing supply slow or halt entirely. Moves to unblock the market and encourage Registered Providers to acquire homes already subsidised by private subsidy are very welcome and will help to boost the supply of both Affordable and private homes."

Kate Henderson, National Housing Federation Chief Executive, said: "Section 106 is fundamental to ensuring affordable housing remains at the heart of mixed communities across the country. This product is strongly welcome and will support housing associations to continue investing in section 106 homes, as part of the sector's ambition to deliver a generational boost to social and affordable housing."

The announcement is part of the bank's five point Growing Together plan, setting out how the bank will help build the conditions for UK wide growth: backing powerful regions, championing mid-market companies, strengthening the country's infrastructure and housing foundations, boosting financial confidence amongst families and young people, and supporting the innovators shaping the future economy. Drawing on its regional footprint, expertise and convening power, the bank aims to bring businesses, communities, and policymakers together to tackle structural barriers, unlock productivity and spread opportunity across the UK.