The government has confirmed additional funding guarantees for SME housebuilders to support the construction of 20,000 homes
The £3bn support package will make it easier for SME housebuilders to access loans, reducing the risk for lenders and increasing the credit supply.
The guarantees will potentially help deliver thousands of new homes across the UK, allowing more families to step onto the property ladder, boosting economic growth, creating jobs, and working towards the 1.5m homes target set by the government for the end of their term.
Matthew Pennycook, housing and planning minister, 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”.
ENABLE Build scheme funding doubled
The funding for the ENABLE Build scheme has also been doubled to £2bn. This will support smaller housebuilders and firms in delivering over 10,000 homes, including student accommodation and specialised housing for elderly people in areas with the most need.
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.”
The government Older People’s Housing Taskforce published a report the day before the £3bn support package was confirmed.
In addition, build-to-rent developers will see almost £2bn guaranteed to expand the variety of projects eligible for lending, reducing delays. This will open at the end of the year and is estimated to support the creation of 20,000 more homes.
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”.
SME housebuilders play a vital role in helping the government achieve its 1.5m housing target, says industry
Brian Berry, chief executive of the Federation of Master Builders (FMB), said: “SME housebuilders 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.”
Sean Keyes, CEO, Sutcliffe: “The announcement of £3bn in government support for SME housebuilders, paving the way for the construction of over 20,000 new homes, represents an important step forward in closing the housing gap and achieving the goal of delivering 1.5m new, quality homes.
“Access to development finance is vital for SME housebuilders, and the doubling of available support from £1bn to £2bn – on top of an additional £1bn – is set to boost confidence among banks, encouraging increased lending to address the severe lack of quality housing that has left people facing hardship.
“SME housebuilders will play a pivotal role in helping the government meet its housing targets during this parliamentary term, contributing to the needs of both current and future generations – while this investment will also strengthen the foundations of the housing market and promote economic growth by supporting SMEs and creating jobs.”
