In an attempt to address the shortage of houses being built, a new partnership between Barclays and the government has been launched to provide £1bn of loan finance to small and medium sized developers across England.
The partnership has been announced by housing secretary James Brokenshire who said money will be made available to those developers who are able to demonstrate the necessary experience and commitment to building excellent new homes. Loans ranging between £5 and £100m will be up for grabs for firms boasting a track record of delivering challenging projects on time and to target.
The initiative has been created due to the share of new homes built by small and medium-sized builders falling rapidly. A lack of access to finance has meant almost 70% of all new homes have been developed by the UK’s 10 biggest housebuilders.
The funding process will be overseen by the government’s delivery agency Homes England. Loans will support the delivery of new homes, including social housing, retirement living and apartments for rent, whilst also encouraging greater innovation on how housing is delivered such as brownfield land and urban regeneration projects.
Commenting on the partnership with Barclays Bank, Brokenshire said: “My priority as housing secretary is to get Britain building the homes our country needs. This new fund - partnering Homes England with Barclays - is a further important step by giving smaller builders access to the finance they need to get housing developments off the ground. This is a fantastic opportunity to not only get more homes built but also promote new and innovative approaches to construction and design that exist across the housing market.”
The latest strategy has been unveiled to help the government achieve lofty ambitions of building 300,000 new homes a year by the mid-2020s, which follows 217,000 homes built last year, the biggest increase in housing supply in England for almost a decade.
John McFarlane, Barclays’ chairman, added: “There is a vital need to build more good quality homes across the country. This £1bn fund is about helping to do exactly that by showing firms in the business of house building that the right finance is available for projects that help meet this urgent need. We are very pleased to be working with government to get the country building more homes, more quickly.”
Responding to the funding boost, Association for Consultancy and Engineering (ACE) director of policy and external affairs, Julian Francis commented: “This is a welcome move. Encouraging small and medium sized developers is key to delivering the government’s ambitious housing targets, and this scheme will help provide the finance needed by these firms for them to proactively and innovatively find ways to, not only plug the housing gap, but deliver more homes for those unable to get on the housing ladder. Only time will tell if this is a success, but this news should be welcomed by SME home builders, renters and first-time buyers alike.”