The government has confirmed a £3 billion new package to support SME housebuilders, the Build-to-Rent sector and deliver more than 20,000 new homes.
As announced in the Autumn Budget, an additional £3 billion in housing guarantees will be available to help builders apply for more accessible loans from banks and lenders.
The guarantees aim to give housebuilders the confidence to “get Britain building again”, by reducing risk for lenders and encouraging them to increase the supply of credit for housebuilders.
The Ministry of Housing believes that ‘thousands of new homes’ will be delivered across the country due to the scheme.
This follows several moves by the Labour party to deliver on their promise to build 1.5 billion homes in the next five years, including the launch of new “Homes Accelerator” to speed up the delivery of 200 stalled housing sites.
Labour unveiled new mandatory housing targets for all councils in England to meet Labour’s targeted 1.5 million homes.
The new mandatory housebuilding target under Labour would rise to 370,000 a year from 300,000.
Between 2022-2023 only 212,570 new homes were built.
The Home Builders Federation (HBF) welcomed the government’s new housing targets, arguing “the scale of the government’s housing ambition has given hope to the home building industry that stands ready to increase supply and tackle the country’s housing shortage.”
As part of the plans, the government is doubling the ENABLE Build scheme to £2 billion so SME housebuilders can support the delivery of more than 10,000 new homes.
Build-to-Rent developers will also see the Private Rented Sector Guarantee Scheme reopen, with nearly £2 billion available to increase housebuilding.
In the Autumn Budget Chancellor Rachel Reeves also announced total investment in housing supply would increase to over £5 billion, with £500 million injected into the current affordable homes programme, increasing it to £3.1 billion.
However, the budget was met with some caution from the construction industry, with some arguing the increased employer National Insurance contributions are likely to increase financial strains on the SMEs.
The government estimates that the increase in guarantees would support over 20,000 more homes.
Housing and Planning Minister, Matthew Pennycook said: “SME housebuilders and Build to Rent operators have a crucial role to play in delivering the government’s target of 1.5 million new homes in this parliament.
“The significant additional support provided by our housing guarantee schemes will enable them to access low-cost loans and support the building of thousands of new homes across the country”.
Brian Berry, chief executive of the Federation of Master Builders (FMB), said: “SME house builders have a crucial role to play in helping to deliver the Government’s ambitious target to build 1.5 million new homes over the next five years.
“In recent years, small house builders have faced a particularly difficult set of financial challenges.
“Diversification of the UK’s housing market is essential to deliver the number of homes needed.
“Today’s Government announcement providing greater support for small housebuilders is welcome news.
“For the Government’s plans to succeed, it will be crucial that this lending is available for those small house builders who need it most and can build the homes this country needs.”
Was this interesting? Try: Northern Bear building services still trading strong
If you have a tip or story idea that fits with our publication, please contact the news reporter/editor
Get industry news in 5 minutes!
A daily email that makes industry news enjoyable. It’s completely free.