Newspaper article The Journal (Newcastle, England)

Thinking 'Outside Box' Offers Solutions; CONSTRUCT ING EXCELLENCE

Newspaper article The Journal (Newcastle, England)

Thinking 'Outside Box' Offers Solutions; CONSTRUCT ING EXCELLENCE

Article excerpt

IN difficult economic times, it can often be the case that doing the same old things is not enough to get by.

Indeed, I have previously stated that a little creative thinking might very well go a long way.

Think tank Policy Exchange appears to have taken the same view, although its latest statement, backing innovation in raising capital, has not met with resounding support.

Then again, when was the last time such an organisation did receive overwhelming praise? On the face of it, Policy Exchange's suggestion that housing associations could raise up to pounds 30bn - enough for 100,000 homes - per year by selling shares, seems a very interesting suggestion. In fact, it is pointing to the potential of a finance option launched six months ago, but which remains hardly used.

The Chartered Institute of Housing (CIH) has been vociferous in taking the lead among those who question the merit of the plan.

Its policy adviser John Perry outlined the practical downside thus: "Several associations are investigating new ways of raising finance, but the issue is always whether they are practical and whether they square with the association's non-profit or charitable status."

Under the system, which was introduced in April, housing associations are allowed to fund house building by giving investors the option to buy preference stock, with interest paid only when it is in profit. …

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