Under new measures revealed by Housing Minister Brandon Lewis small housebuilders will receive a £100m funding boost to support developments…
The launch of the Housing Growth Partnership will see investment in smaller builders working on new developments. It will also provide funding to support their businesses, help get workers onto sites, and increase housing supply.
A network of builders will also be formed under the partnership. This will include experienced developers, who will act as mentors and advisers to companies looking to grow their business.
The government said it had placed housebuilding at the heart of its long term economic plan. They hope to increase the number of new homes to tackle the housing shortfall and create more jobs in the construction industry. Over the last 25 years the number of firms between 1 and 100 units a year has fallen from more than 12,000 to fewer than 3,000.
The latest figures revealed starts and completions have risen in the past year and the number of homes granted planning permission reached the highest annual total for eight years. It is hoped the Housing Growth Partnership will enable small building companies to play a greater role in construction.
The £100m funding will be made up of an investment from the Lloyds Banking Group of £50m, which will be matched by the government. It is expected the partnership will make around 50 investments and will provide an additional 2,000 homes.
Housing Minister Brandon Lewis said: “The 2008 economic crash devastated our army of small builders, with delivery falling from 44,000 homes to just 18,000 – seven years on, companies are getting back on their feet but we’re determined to give them all the help they need.
“Access to finance is one of the biggest challenges they face – so that’s why today I’m launching this £100 million commitment which will help our smaller builders fund new projects, expand their businesses, create more jobs and build more homes.
“With housing starts at a seven-year high and climbing and homes granted planning permission at 261,000 – the highest since 2007, this work will ensure we maintain this momentum and keep the country building.
Andrew Bester, Group Director and Chief Executive, Commercial Banking, Lloyds Banking Group said: “The challenge of housing supply and affordability is one of the biggest issues facing Britain today, so we at Lloyds Banking Group welcome the government’s announcement of support for the Housing Growth Partnership, which will double the capability to support SME house builders.
“It will provide SME house builders with much needed equity to support residential development projects, to stimulate growth in their businesses and facilitate access to conventional property development finance.
“We believe building both a greater quantity and mix of homes will help Britain prosper and this partnership will help address the issue of housing supply in the UK.”
The scheme will invest in small and medium sized housebuilders who can show they have a track record in delivering residential development schemes. It will benefit builders who have completed on average between 10 and 1,000 single unit completions annually over the past three years.
Brian Berry, Chief Executive of Federation of Master Builders, said: “There has been a sharp decline in the numbers and output of SME house builders over the past 8 years.
“One of the biggest obstacles these firms have faced is a severe difficulty in accessing finance.
“Without adequate access to finance they cannot bring forward the number of new homes they would otherwise.
“The new Housing Growth Partnership will directly help to address this issue and the additional £50 million greatly increases the scale of what can be achieved.
“We commend Lloyds Banking Group and the government on their trailblazing approach and we hope this marks a real turning point in the fight to provide adequate finance to the SME house building sector.”