Hundreds of thousands of extra homes are expected to be built through a new government-backed ‘housing bank’.
The National Housing Bank, a subsidiary of Homes England, will be publicly owned and backed with £16 billion of financial capacity, on top of £6 billion of existing finance to be allocated this Parliament, to accelerate housebuilding and leverage in £53 billion of additional private investment, creating jobs and delivering over 500,000 new homes.
Under the new scheme, Homes England, the national housing and regeneration agency, will be able to issue government guarantees directly and have greater autonomy and flexibility to make long-term investments.
The launch of the bank comes after a £39 billion investment was announced at this month’s Spending Review for a new 10-year Affordable Homes Programme. The bank will deploy some of the £2.5 billion in low-interest loans announced at the Spending Review to support the building of social and affordable homes.
The bank will help unlock a wide range of sites, including larger ones which struggle to get up-front lending given their risk and complexity, using a mixture of equity investment, loans and guarantees to leverage global institutional capital into UK housing, reducing risk at the early stages of development.
It will also support SME lending by establishing additional lending alliances with private sector partners and leveraging additional capital and expertise, including providing revolving credit facilities to help SMEs grow and build out their housing pipeline more quickly.
This follows proposals previously announced to bolster the capabilities of SME developers, which provide local jobs and train construction apprentices, by streamlining and simplifying overly complex planning rules.
“We‘re turning the tide on the housing crisis we inherited – whether that’s fixing our broken planning system, investing £39 billion to deliver more social and affordable homes, or now creating a National Housing Bank to lever in vital investment,” said Deputy Prime Minister and Housing Secretary Angela Rayner.
“This government is delivering reform and investing in Britain’s renewal through our Plan for Change. Our foot is firmly on the accelerator when it comes to making sure a generation is no longer locked out of homeownership – or ensuring children don’t have to grow up in unsuitable temporary accommodation, and instead have the safe and secure home they deserve,” she said.
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