The Church Commissioners of the Church of England have this week sold their financial interest in a portfolio of housing loans granted to the Church Pensions Board to Grainger Trust. The sale follows a competitive tender that attracted bids from a range of commercial companies.

The transaction is a sale of the Commissioners' rights to receive income and capital receipts on the loans and is not a sale of the 'bricks and mortar'. The purchasers will have no legal interest in the loans which will continue to be administered by the Church of England Pensions Board.

The announcement follows a statement made on 4 October 2006 that the Commissioners had begun detailed discussions to sell the financial interest.

Currently, around 1,300 retired clergy in the Church of England have mortgages provided by the Pension Board (largely funded by the Church Commissioners) to assist them in the purchase of retirement housing under the Church Housing Assistance for the Retired Ministry Scheme (CHARM).

The Pensions Board has written to all the retired clergy concerned to advise them of the transaction, and reassure them that their loan conditions with the Pensions Board remain unchanged, the Church of England said yesterday.

The announcement comes as the Church explores ways in which clergy might be helped to acquire an interest in the property market earlier in their ministries. These include providing clergy with information about buy-to-let mortgage products available from lenders at preferential rates.

Other options, such as a form of 'property bond', in which clergy could invest ahead of their retirement, are also being considered.

Andrew Brown, Secretary to the Church Commissioners, said: "This agreement represents the completion of a major strategic shift by the Commissioners away from our previous over-investment in the UK residential property market. At one point, this had been as high as 22 per cent of our total assets. Now it stands at around 13 per cent.

"We are pleased to have protected the position of the borrowers, whose loans will remain unaffected by this transaction while also securing an excellent financial deal for the Church Commissioners."

Rupert Dickinson, Grainger's Chief Executive, said: "This acquisition is an excellent fit with the rest of Grainger's equity release and retirement solutions business and demonstrates Grainger's ability to source and deliver innovative transactions. We are delighted to be able to work with the Church Commissioners and the Church of England Pensions Board on this transaction."