UK small home builders get finance boost
Small house builders in the UK are to benefit from a £100 million cash boost to recognise and support their important role in keeping the country building.
Housing Minister Brandon Lewis said that The Housing Growth Partnership 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 latest figures show that in the last 25 years, the number of firms building between one and 100 units a year has fallen from over 12,000 to fewer than 3,000 but house building figures show starts have more than doubled since those seen during the same period in 2009 and Lewis said he wants smaller firms to be involved in this growth.
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.
‘The 2008 economic crash devastated our army of small builders, with delivery falling from 44,000 homes to just 18,000 and now seven years on companies are getting back on their feet but we’re determined to give them all the help they need,’ said Lewis.
‘Access to finance is one of the biggest challenges they face so this £100 million commitment will help our smaller builders fund new projects, expand their businesses, create more jobs and build more homes,’ he pointed out.
‘With housing starts at a seven 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,’ he added.
According to Andrew Bester, group director and chief executive of commercial banking at Lloyds Banking Group, it will help address the challenge of housing supply and affordability in the UK’s housing market.
‘It will provide SME house builders with much needed equity to support residential development projects, to stimulate growth in their businesses and facilitate access to conventional property development finance. We believe building both a greater quantity and mix of homes will help Britain prosper,’ he added.
Brian Berry, chief executive of the Federation of Master Builders, confirmed that 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,’ he said.
‘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 hope this marks a real turning point in the fight to provide adequate finance to the SME house building sector,’ he added.
