A new £3bn Home Building Fund has been created to provide loans for SME housebuilders, custom builders, offsite construction and essential infrastructure with the aim of building 25,000 new homes by 2020 and up to 225,000 in the longer term.
The announcements came from chancellor Philip Hammond and communities secretary Sajid Javid at the Conservative Party Conference, stating that the measures are to “ensure everyone has a secure place to live”.
The money will be used to provide loans for SME housebuilders and Government has also set out plans to take action on attempting to fix the housing market, using public land and an extra £2bn of investment to encourage new developers and different models of construction to build at up to double the rate of traditional housebuilders.
The industry has welcomed the fund, saying that it will help ease the housing crisis. Brian Berry, chief executive of the Federation of Master Builders (FMB), said: “We welcome the Government’s renewed focus on housebuilding and its recognition that without a resurgent SME sector, there’s little prospect of the country tackling its chronic under-supply of new homes.
“The launch of a £3bn Home Builders Fund, a significant part of which will be specifically targeted at supporting small scale developers, will tackle one of the key barriers to SME housebuilders – a lack of access to finance.
“If the Government get the details of this fund right, we would hope that the anticipated building of 25,000 homes over the course of this Parliament could act as a real catalyst for a much wider revival of SME housebuilders.”
Mark Sismey-Durrant, chief executive officer at Hampshire Trust Bank, commented: “We welcome Philip Hammond’s comments regarding the need for long term solutions to the housing market. We face a continued imbalance between supply and demand and this structural market weakness has been exacerbated by fiscal measures targeted at buy to let investors.
“There is no doubt we need more affordable housing and more support for housing associations to deliver this would be helpful for the rest of the market. UK housebuilders need some encouragement from the government to keep building homes for people to live in.”