Government Funds £100m Initiative for Small House Builders
The Housing Minister, Brandon Lewis, has announced that small house builders will benefit from a £100m cash initiative to support them in solving the country’s housing crisis.
The Housing Growth Partnership will help smaller builders invest in new developments, provide finance to grow their businesses, help get workers onto sites and increase housing supply.
The Partnership will also aim to develop a network of builders, selecting experienced firms to act as mentors and advisers to smaller companies that wish to expand.
In the past 25 years, the amount of firms building between 1-100 units per year has declined from over 12,000 to less than 3,000.
The Government has highlighted house building as the core of its long-term economic plan, hoping to build the homes that communities want and need, and create jobs in the construction industry.
Government Funds £100m Initiative for Small House Builders
Recent house building data reveals that starts have more than doubled since the same period in 2009. Starts and completions have increased in the last year and the amount of homes granted planning permission is at its highest rate for eight years.
The Housing Growth Partnership, launched last Monday, will support small builders in driving even more success.
The Government has matched a £50m investment from Lloyds Banking Group to form the Partnership.
The Partnership hopes to make around 50 investments and provide a further 2,000 homes.
Brandon Lewis says: “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 [Monday 6th July] I’m launching this £100m 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.”1
Group Director and Chief Executive of Commercial Banking at Lloyds Banking Group, Andrew Bester, comments: “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 [Small and medium-sized enterprises] 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.”1
Brian Berry, Chief Executive of the Federation of Master Builders, adds: “There has been a sharp decline in the numbers and output of SME house builders over the past eight 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 £50m 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.”1
The Housing Growth Partnership will investment alongside: small and medium-sized house builders who have evidence of a strong history in delivering residential development schemes and house builders who create an average of 10-100 single unit completions annually over the last three years, and have a proven track record of land buying, design, construction, marketing and sales of new homes.
The Partnership will support residential development projects with a gross development value of between £750,000-£12m and will provide investments in the range of £500,000-£5m for each project.