Peabody secures £60m retrofit loan from large bank

Housing association Peabody has secured a £60m loan from a large bank to retrofit thousands of social homes in London and the South East.

Lloyds said the new loan will enable Peabody to carry out energy-efficiency upgrades, including wall and loft insulation, low-energy lighting and heat pumps.

These upgrades will come in addition to solar panels, flood-resilience measures and water-saving technologies.

The loan from Lloyds Banking Group is partially guaranteed by the government’s National Wealth Fund (NWF). It is the largest loan issued to date under the NWF’s £1.3bn social housing retrofit guarantee scheme.

Under the scheme, Barclays and Lloyds will each deliver £500m of lending backed by guarantees of up to £750m provided by the NWF.

The guarantees will support shorter-duration loans to be provided by Lloyds and mid to long-duration loans to be provided by Barclays.

Phil Day, chief financial officer at Peabody, said: “This additional funding is very welcome and will help us improve the energy efficiency of more residents’ homes, making them easier to keep warm and helping us meet our net zero targets.

“Our new group strategy focuses on three areas, one of which is providing better homes and places, and we’re pleased to be able to work with Lloyds to help deliver on our goals.”

Jess Tomlinson, head of real estate and housing at Lloyds Banking Group, said: “Accelerating the retrofit of the country’s social housing stock is a critical step in the UK transition to a low carbon economy.

“We’re proud to be working in partnership with the National Wealth Fund to enable housing associations, like Peabody, to provide more energy-efficient and cost-effective homes across the UK – helping improve health, work and home life for thousands of social housing residents.”

Stuart Nivison, head of portfolio management at the NWF, said: “We’re pleased to see our financial guarantee scheme in action, playing an important role in this significant transaction between Lloyds and Peabody.

“The scale of the retrofit challenge facing the social housing sector is clear, and by working in partnership with Lloyds we can help registered providers like Peabody access the financing they need to accelerate the delivery of warmer, greener homes for their tenants.”

Last year, Peabody upped its spending on residents’ homes by 16%, going from £371m in 2023-24 to £430m in 2024-25.

Over the same period, its investment in its new homes development programme fell from £495m to £333m.

Ian McDermott, chief executive of Peabody, pointed to the association’s “top priority” of looking after residents’ homes.