BREXIT will cost a Ceredigion housing association an extra £250,000 a year and could undermine the construction of affordable homes, its chief executive has claimed.

Mid Wales Housing Association boss Shane Perkins said costs of funding big projects, such as the construction of the proposed £10m Cylch Caron Integrated Resource Centre in Tregaron, would shoot up without access to cheaper borrowing from the European Investment Bank.

Mr Perkins said borrowing through the EIB was around half the cost of borrowing by other means, and warned that the additional cost “undermines the financial viability of any project”.

His words come after Community Housing Cymru, the body which represents Welsh housing associations, warned that uncertainty surrounding Brexit had cast doubt on EIB loans worth more than £200m for the construction of 13,000 affordable homes by 2021.

“In very broad terms the cost of borrowing from the EIB was half that of routine borrowing — at 2.5 per cent instead of five per cent,” said Mr Perkins.

“Hence the cost of seeking funding elsewhere amounts to an additional £250,000 to our annual running costs.

“Obviously, any such additional cost undermines the financial viability of any project. In respect of Cylch Caron, the association has alternative funding available it can use instead, but there is a cost.

“It is disappointing to learn that the Welsh social housing sector will no longer be able to access funding from the EIB, as it will add significantly to our costs.”

And while Tai Ceredigion’s chief executive said the housing association was “not directly affected” by Brexit uncertainty, it could ultimately lead to fewer funding options for the construction of affordable homes.

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