The government has extended the existing Home Building Fund beyond March next year.
- Government-backed fund extended to deliver an extra 12,000 new homes
- Up to £700 million more loans to boost SMEs and support government's Plan for Change milestone of 1.5 million homes
- Builds on £3 billion expansion of housing guarantees for SMEs and Private Rented Sector to get Britain building
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, Angela Rayner 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.
