A financial support package of up to £700 million for small and
medium-sized housebuilders will be up for grabs through the
expansion of a significant government programme to boost economic
growth and build tens of thousands of new homes.
The existing Home Building Fund for SMEs is being extended beyond
March next year to secure millions of pounds worth of loans and
investments for small housebuilding firms who would otherwise be
unable to access lending elsewhere.
The Fund had been due to close to new business on 31 March next
year, but the government has now committed to provide ongoing
funding.
Providing a range of financial support, including direct loans
and lending partnerships, the Fund is increasing the amount of
cash available for smaller housebuilders so they can play a
crucial role in the government's Plan for Change to build 1.5
million new homes over five years. This will get more families
onto the property ladder and create jobs in the areas most in
need.
The extension will support the delivery of around 12,000
additional homes – on top of the 42,000 homes the Fund is already
on track to deliver.
Housebuilders struggling to access the credit they need continues
to be a key constraint in driving growth across the sector and
today's intervention will help remove these barriers to encourage
more housebuilding and grow the economy.
Deputy Prime Minister and Secretary of State for Housing,
said:
“Smaller housebuilders have a critical role to play in our Plan
for Change to help us build 1.5 million homes over five years and
the government is fully committed to backing them to
grow.
“Government loans are providing vital support to many
housebuilders in the SME sector, but previous failures to provide
ongoing funding meant the scheme had been set to shut its doors
in March.
“They must be the bedrock of our plans. That is why I'm extending
the fund so more of them can access the capital and investment
needed to deliver thousands of new homes across the country and
help us fix the housing crisis for good.”
The Fund is managed by the government's housing and regeneration
agency, Homes England, who have already provided development
loans to hundreds of small and medium housebuilders up and down
the country to build more homes and expand their
businesses.
Chief Executive of Homes England, Peter Denton
said:
“The Fund is playing a vital part in England's housing and
regeneration story. It is at the heart of unlocking opportunities
and helping the market to thrive and diversify, which is
essential to boost the creation of new, high-quality, sustainable
homes that people want and need.
“The Fund's extension brings certainty to the sector and will
undoubtedly open doors for SMEs, who I would encourage to reach
out to us, as part of a collective mission to ensure everyone in
the country has a permanent place to live and thrive.”
Chief Executive of the Federation of Master Builders,
Brian Berry said:
“The Government's greater support for small house builders by
extending the Fund is a positive step to help diversify the
housing market.
“The last few years have posed a difficult set of financial
challenges for the nation's small house builders, so it will be
vital that these various lending options can help kick start
developments. Boosting the output from SME housebuilders is
crucial to hit the Government's target of delivering 1.5 million
new homes in this Parliament.”
Previous recipients of the Fund include Kingswood Homes in
Lancashire who have more than doubled their yearly housebuilding
targets and the Bristol-based developer, PG Group, tripling the
number of affordable homes available on a brownfield site for
lower income families.
In addition to supporting SMEs, the Fund also helps unlock
investment from pension funds and institutional investors,
including the recently announced £25 million deal with Muse
Places Limited and Pension Insurance Corportation to deliver
3,000 energy-efficient new homes, all of which are intended to be
affordable.
This follows the £3 billion in additional government support for
SMEs and the Build to Rent sector confirmed at the Budget, which
will help deliver over 20,000 more homes through the expansion of
existing housing guarantee schemes.
The extension of the Fund will also support the government's
overhaul of planning laws through a new growth focused National
Planning Policy Framework that is reinstating new, mandatory
housing targets for councils across England.
Further information
The current Home Building Fund is designed for housebuilders
based in England that are struggling to access finance from
traditional lenders. More information is available here.
Case studies to see how a development loan has benefitted other
small and medium housebuilders can be found here.
The Budget recently confirmed existing housing guarantee schemes
will receive £3 billion more in
government support.
