Billions of pounds in guarantees for housebuilders are now open for business as part of a new support package confirmed by the Housing Minister today.
Over 20,000 new homes through vital support for SME housebuilders and the Build-to-Rent sector.
Existing schemes to receive £3 billion more in government support to help deliver 1.5 million homes.
Builds on £5 billion investment in housing for next year.
Billions of pounds in guarantees for housebuilders are now open for business as part of a new support package confirmed by the Housing Minister today.
As announced at the Budget, an additional £3 billion in housing guarantees will be available to help builders apply for more accessible loans from banks and lenders, giving them the confidence they need to get Britain building again.
Government guarantees reduce risk for lenders and encourages them to increase the supply of credit for housebuilders. Housebuilder's access to credit is a key constraint on growth in the sector, so guaranteeing more lending encourages more housebuilding.
Thousands of new homes will be delivered across the country because of the government's latest invention, which will see more families onto the property ladder, boost economic growth and create jobs, and support the ambition to build 1.5 million homes over the next five years.
This includes doubling the ENABLE Build scheme to £2 billion so smaller housebuilders and firms can support the delivery of over 10,000 new homes, including more student accommodation and specialised housing for older people, in areas most in need.
Build-to-Rent developers will also see the Private Rented Sector Guarantee Scheme reopen at the end of the year, with nearly £2 billion available to ramp up housebuilding. A broader variety of projects will be eligible to access additional lending, so more housing projects can be completed without unnecessary delays.
Based on the performance of the schemes so far, the government estimates that the increase in guarantees would support over 20,000 more homes.
Housing and Planning Minister, Matthew Pennycook said:
"SME housebuilders and Build to Rent operators have a crucial role to play in delivering the government's target of 1.5 million new homes in this parliament.
"The significant additional support provided by our housing guarantee schemes will enable them to access low-cost loans and support the building of thousands of new homes across the country".
Brian Berry, Chief Executive of the Federation of Master Builders (FMB), said:
"SME house builders have a crucial role to play in helping to deliver the Government's ambitious target to build 1.5 million new homes over the next five years. In recent years, small house builders have faced a particularly difficult set of financial challenges. Diversification of the UK's housing market is essential to deliver the number of homes needed.
"Today's Government announcement providing greater support for small housebuilders is welcome news. For the Government's plans to succeed, it will be crucial that this lending is available for those small house builders who need it most and can build the homes this country needs."
Louis Taylor, CEO, British Business Bank said:
"We welcome this £1bn expansion of the Bank's ENABLE Build programme by the government. Unlocking finance for smaller housebuilders is more important than ever, not just to help build homes across the UK's Nations and regions and provide people with security, but also to stimulate much-needed growth for the UK economy. Combined with the ENABLE Build programme's recent expansion to include provision to non-bank lenders, this means that the sector will benefit from both an increased volume and choice of finance."
Richard Green, Partner at Venn Partners said:
"Build-to-rent can play a key role in the UK's private rented sector, delivering high quality, well managed homes funded by institutional investors. Venn looks forward to continuing to support the sector with attractive loans from the PRS Guarantee Scheme".
To accelerate housing development and achieve the ambition to build 1.5 million homes over the next five years, the government has already:
- Announced an overhaul of the planning system through a consultation on reforms to the National Planning Policy Framework, including new mandatory housebuilding targets for councils: LINK
- Launched a New Homes Accelerator group to unblock thousands of new homes stuck in the planning system or partially built. LINK
- Introduced 'brownfield passports' to ensure where planning proposals meet design and quality standards, the default answer to planning permission is yes: LINK
- Set up an independent New Towns Taskforce, as part of a long-term vision to create largescale communities of at least 10,000 new homes each: LINK
- Awarded £68 million to 54 local councils to unlock housing on brownfield sites: LINK
- Awarded £47 million to seven councils to unlock homes stalled by nutrient neutrality rules. LINK
