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The message from government is that the Guernsey Housing Association is unlikely to lose State support anytime soon.
The GHA was created to work in tandem with the Committee for Employment & Social Security in developing social housing. It is secured financially by the States of Guernsey, through an underwriting Guarantee, and the States have over the years supported the Association through a series of loans.
The most recent loan was for £7.2million, and was made this year. It allows the GHA to continue to build homes and buy land to accomplish objectives within the ‘Affordable Housing Development Project’.
The most recent loan brings the total number of loans - made by the States to the GHA – to six, equating to £111.3million. “The current outstanding balance is £95million,” according to the States, “including the £7.2million loan made this year.”
In 2013 the States agreed to issue a £330million bond. It borrowed the money, not to fund public services, but to lend on to Bailiwick businesses intrinsically tied to the States and who provide essential infrastructure or services to the island. The idea being that the States could ensure a reduced cost of borrowing. The bond was also used to consolidate existing debt.
All the money loaned to the GHA to date has been pulled from this bond.
The process of borrowing more involves “the GHA submitting a request to the Treasury/P&R, if the project has been approved by the CfESS to fit with the States’ housing objectives” according to a spokesperson from the States.
No further loans have recently been requested, but the States of Guernsey does expect more in the future “which the States of Guernsey would support subject to financial due diligence”.
When asked what could happen to the Association or Guernsey’s housing market in general if the GHA were ever to lost States’ support or a loan facility, Express was told: “This is an unrealistic scenario given the role of the GHA in the States’ Housing Programme.”
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