03 February 2006
Lenders and developers are showing renewed interest in housing schemes funded through the Private Finance Initiative, a leading civil servant said this week.
After watching some pathfinder schemes finally get under way after lengthy delays, more firms were keen to become involved, according to Ellie Simcox, housing PFI team leader at the Office of the Deputy Prime Minister.
'The market is more confident of a flow of schemes coming through in the next few years,' she told a Capita conference in London on January 31.
Thirty-six housing PFI schemes have been approved by the ODPM, although just ten local authorities have signed contracts. Some pathfinder schemes took five years to finalise due to procurement problems.
The increasing interest by lenders and developers follows a government decision to allow the PFI to be used for new house building, including the demolition and reconstruction of homes, as well as refurbishment.
The ODPM expects 6,300 homes to be built through the PFI during the next few years. This is on top of the 34,000 homes funded annually by the Housing Corporation.
About 28,000 homes should be brought up to the decent homes standard through the PFI, which has received £2.7bn of public funds since 2001. Bids for a fifth round of schemes must be submitted by March 31.
Jeremy Allcock, head of project finance at the Nationwide Building Society, said lenders assessed the merits of each PFI scheme but had to bear in mind the complexity of consulting tenants.
'It's much easier to take a global view when you are dealing with a school or hospital than a diverse housing estate with more than 1,000 clients,' he said.
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