What looked like an appealing deal has been catastrophic for many social landlords and local authorities - and it’s the people at the bottom who suffer
For many councils and housing associations,the wolf is at the door. In Spanish and Portuguese, lobo is one word for the fearsome canine. It’s fitting then, or that the latest instrument of predatory capitalism to attract attention – lender option borrower option agreements – are called lobo loans for short.
The loans,typically long-term from 40 to 70 years, were taken up by as many as 63% of local authorities in the UK, and as a way of funding services post-recession. For housing associations,many considered lobo loans the only funding option given the shrinking of grants: the less stable associations had committed to development contracts, but were starved of cash.
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Source: theguardian.com