The Government have announced new initiatives to aid housebuilding – including the launch of a £3billion Home Building Fund focussed on SME housebuilders.
The Chancellor Philip Hammond and Communities Secretary Sajid Javid, have announced new measures designed to increase the speed and volume of housebuilding.
Measures include the launch of a £3 billion Home Building Fund which is designed to help to build more than 25,000 new homes this Parliament and up to 200,000 in the longer term. The fund will provide loans for small and medium enterprise builders, custom builders, offsite construction and essential infrastructure.
Sajid Javid said: “We want to ensure everyone has a safe and secure place to live and that means we’ve got to build more homes. It is only by building more houses that we will alleviate the financial burden on those who are struggling to manage.”
Homes and Communities Agency CEO Mark Hodgkinson said: “We’re determined to speed up delivery and promote new approaches to housebuilding. The new Home Building Fund offers the industry flexible development and infrastructure finance and we’re open for business right away. From today, builders and investors just need to give us a call to start discussing funding for new homes. Our dedicated team will also provide expert ongoing support to new entrants to the sector and those companies proposing innovative solutions to speed up house building.”
Government has indicated that the launch of a £3 billion Home Building Fund will:
- provide £1 billion of short term loan funding – this will be used for small builders, custom builders, and innovators, delivering 25,000 homes in the short term
- will provide £2 billion of long term funding for infrastructure – this will be used to unlock a pipe line of up to 200,000 homes over the longer term – with the emphasis on developments on brownfield land.
Industry reaction
Stewart Baseley, Executive Chairman of the Home Builders Federation: “Even after the huge increases in housing supply over the past few years we are some way short of building the number of homes the country needs. House builders are still stifled by planning delays that prevent them getting on sites and delivering homes more quickly. Efforts to address this and remove some of the many barriers that new entrants face when trying make it into the industry and build new homes will undoubtedly help to boost housing output.”
Brian Berry, Chief Executive of the FMB: “We welcome the Government’s renewed focus on house building and its recognition that without a resurgent SME sector, there’s little prospect of the country tackling its chronic under-supply of new homes. The launch of a £3 billion Home Builders Fund, a significant part of which will be specifically targeted at supporting small scale developers, will tackle one of the key barriers to SME house builders – a lack of access to finance. One in two local house builders cite difficulty accessing finance as a major barrier to their ability to build more homes, demonstrating the latent potential of a sector that can play a much larger role in tackling the gap between supply and demand of new homes.”
Melanie Leech, Chief Executive of the British Property Federation: “We are glad to see Government getting on with ‘business as usual’. Brexit cannot be allowed to distract us all from the pressing need to build more homes. Plans to use surplus public land to build homes faster and changes to planning rules to help build on brownfield land are both very welcome news, particularly for the build to rent sector. Purpose-built rental development mostly takes place on brownfield land and therefore anything that helps with planning will be welcomed with open arms by our sector. We look forward to more details on use of public land and modern construction techniques, which are being embraced by the build to rent sector.”
James Bloom, Managing Director of Masthaven’s development finance division: “We welcome the announcement from the Chancellor about creating a fund for loans for SME housebuilders but this is something we have been anticipating for some time. The difficulties of such measures is ensuring that funding released through the big banks filters down to the SME housebuilder and that finance is accessible for most borrowers.”
