The Housing Growth Partnership wants to spend £300m taking equity in smaller housebuilders.
The partnership, funded by Lloyds Banking Group and Homes England, said that the equity stakes could support the development of 10,000 new homes by 2025. It aims to bridge the homebuilder equity funding gap, allowing housebuilders to build more homes across the UK and grow their businesses.
The new equity will be provided via a split of £180m from Lloyds Banking Group and £120m from Homes England.
Since the launch of the first fund in 2016, the HGP has invested alongside 46 housebuilders to support the delivery of over 4,500 new homes, with nearly half now completed.
The new fund will be broader in scope to allow investment into larger housebuilding projects, with a development value of up to £75m. Developers building between five and 500 units per year will be eligible, and up to £10m is available for individual housebuilders.
The fund will support a wider range of projects including BTR, regeneration, and retirement living. The partnership will also look to prioritise projects with a greater sustainability focus, as well as those using modern methods of construction and other evolutionary construction methods.
Harry Swales, CIO at Homes England, said: ‘The Housing Growth Partnership has already proved to be a huge public-private sector success and we’re now pleased to expand the fund to offer SMEs further support. By injecting this additional investment and harnessing Lloyds Banking Group’s commercial skills we’re able to diversify the market, support increasing numbers of builders and provide the homes the country needs.”
Alongside this the Regional Growth Initiative will provide additional assistance to the most ambitious regional housebuilders in the UK. The first five regional partnerships are already in place across four different regions of the UK with Genesis Homes, Durkan, Stonewood Partnerships, Briar Homes and Cruden Homes.
Vic Hepburn, CEO of HGP, said: “The introduction of the Regional Growth Initiative will also allow the Housing Growth Partnership to support the most ambitious housebuilders in a more substantial way, with additional financial and strategic support.”
Housing minister Christopher Pincher said: “It is a top priority of this government to increase housing supply so hardworking people can be helped into home ownership. This significant amount of funding will help smaller and regional housebuilders by providing them with the financial support necessary to deliver much needed new homes.”
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