Small builders are set to benefit from a £100 million cash boost from a new Government initiative which aims to provide an additional 2,000 homes in the UK.
The Housing Growth Partnership, launched today (6th July), will act as a dedicated initiative that will invest alongside smaller builders in new developments, providing money to support their businesses, helping get workers onto sites and increasing housing supply.
The Partnership will also establish a network of builders, including experienced developers, who will act as mentors and advisers to those looking to expand and grow their businesses.
The government has matched a £50 million investment from Lloyds Banking Group to create the £100 million Housing Growth Partnership, which will be used to help smaller builders to invest in new projects and develop their businesses, allowing them to recruit and train skilled workers and become more competitive in their local area.
The partnership expects to make around 50 investments, with the aim to 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 – 7 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 7-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.”
Brian Berry, chief executive of Federation of Master Builders, who called on the government to provide better access to finance for the SME house building sector, welcomed today’s announcement.
He 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.”
The Partnership seeks to invest alongside small and medium sized house builders who have evidence of a solid track record in delivering residential development schemes, as well as housebuilders who on average have 10-100 single unit completions annually over the past 3 years, and have a proven track record in land buying, design, construction, marketing and sales of new homes.
The initiative will support residential development projects with a gross development value of between £0.75 million and £12 million and will offer investments in the range of £0.5 million – £5 million for each project.