The Church of England has raised new finance to support the provision of housing for its growing numbers of retired clergy.

A charitable fund within the Church of England pensions board this week raised £70 million of bonds to pay for the houses with a further £30 million available to draw down in future,

The bonds, financed by the Pension Insurance Corporation, operate like a mortgage against the existing £150 million worth of clergy retirement houses, about 750 in all. Such bonds are a common method used in the world of housing associations to pay for expansion.

The "mortgage" will be paid back to the corporation from the rents paid by the clergy and support from the wider church. The clergy will pay these rents from their own pensions.

Hundreds of clergy are coming up for retirement as the 1950s and 1960s baby boomers reach their late 50s and early 60s. Clergy usually live rent-free throughout their working lives in vicarages and rectories owned by the Church of England. The Church maintains the properties which usually have gardens and a built-in office and can be lovely places to raise families.

Clergy stipends are generally too low to allow ministers to save enough to buy a retirement house, especially with soaring property prices. So the Church considers it part of its responsibility to its dedicated servants of the cloth to make sure they are properly housed for the rest of their lives, especially as many retired clergy and bishops continue to work for free in parishes during interregnums and to allow stipendiary clergy a holiday or two.

Part of the bond will go to buy out the Church Commissioners' interest in 196 homes in the Church Housing Assistance for Retired Ministers, or CHARM scheme.

Dr Jonathan Spencer, pensions board chairman, said: "The board is committed to ensuring that it can continue to provide those retiring clergy who need it with affordable housing in retirement. We decided the time was right to look at long term capital finance to help secure the future of the retirement housing scheme. This is the next step on our journey to build a portfolio of properties that will continue to meet future expected clergy demand."

Alan Fletcher, chair of the board's housing committee, said, "This new long term financing arrangement will bring greater certainty over borrowing costs, by taking advantage of the current low interest rate environment."