SME developers and builders will soon have access to £250,000 home-building loans through the government’s Levelling Up Home Building Fund, announced as part of its new White Paper.
It wants to encourage innovative projects to build rental and for-sale homes, such as community-led housing projects and groups of small firms working together to deliver larger sites and will share out the new £1.5 billion fund in the hope it will lead to 42,000 new homes being delivered.
Individuals and UK firms will be eligible for finance as long as their project is financially viable, they are planning on building or refurbishing five or more homes on a site in England, and their project would stall, or progress much less quickly, without the cash.
They need to have a controlling interest in the land and a clear route to achieving planning consent.
Managed by Homes England, the fund offers finance from £250,000 for a five-year term but the government has also partnered with Invest & Fund to hand out loans of between £400,000 and £2.5 million for applicants who are planning fewer than five units.
Brian Berry, chief executive of the Federation of Master Builders, says the loans should be targeted at reversing the decline in SME housebuilders, who are now delivering only 12% of the country’s housing stock, down from 40% in the 1980s.
“Local housebuilders develop on underutilised land that will be vital for hitting housing targets. However, these plans must make sure we’re helping to deliver new homes where demand is highest.”
He adds: “It’s positive that the government is taking steps to improve the quality and energy efficiency of our existing housing stock in the private rented sector. Local builders will be critical to the success of this policy and should be considered at each point of its implementation.”
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