14 September 2018
Housing Secretary James Brokenshire MP has announced a new partnership between Homes England and Barclays Bank to provide £1 billion of loan finance to help support small and medium sized (SME) developers get access to the finance they need to get housing developments off the ground.
Aimed at speeding up delivery, the fund is open to developers borrowing between £5million and £10million, building 10 homes or more, with a previous track record and a majority control of the development site.
The National Federation of Builders (NFB) welcomes the announcement of new funding but remains concerned that the Government’s efforts to solve the housing crisis have moved away from making the planning process more efficient.
Planning remains the greatest barrier for SMEs and regional contractors looking to grow local communities and deliver more homes. The fund may hence struggle to make a difference because developers cannot access the fund unless they already have planning permission in place.
The schemes requirements may also struggle to attract new entrants into the market, because it is more appropriate for medium sized developers and those building in high value regions. Richard Beresford, chief executive of the NFB, said:
“There is an industry demand for funding, but the majority of builders need an efficient planning process. The Government missed its opportunity to do that through the NPPF review and should be investing in mechanisms that assist underfunded planning departments such as the Planning Deliver Fund. Due to the scheme’s requirements on developments’ size, SME developers may not actually be eligible for the fund. With the fund only open to developments above the national threshold for affordable housing contributions, it will still directly increase the supply of affordable houses.”