Building for the future
Barclays has teamed up with the UK government to offer smaller housebuilders access to a £1bn pot of loan finance to help construct more homes across England.
Competitively priced loans ranging from £5m to £100m will be available to developers who can demonstrate the experience needed to undertake proposed house building projects, thanks to a new fund launched this week by Barclays in partnership with the UK government.
With almost two-thirds of homes built by just 10 companies, the fund aims to diversify the house-building market, supporting small and medium sized businesses in the development of social housing, retirement living and homes for rent – while also encouraging innovation in brownfield and urban regeneration projects.
There is a vital need to build more good quality homes across the country. This £1bn fund is about helping to do exactly that
A total of £875m of the Housing Delivery Fund will be provided by Barclays, with Homes England, the government’s national housing agency, contributing the remaining £125m. The development finance aims to increase access to home ownership.
Launching the fund, Barclays’ Chairman John McFarlane said: “There is a vital need to build more good quality homes across the country. This £1bn fund is about helping to do exactly that by showing firms in the business of house building that the right finance is available for projects that help meet this urgent need.”
He added: “We are very pleased to be working with government to get the country building more homes, more quickly.”
Housing Secretary James Brokenshire MP said the fund is a further important step in giving small builders access to the finance they need to get housing developments off the ground, pointing to “a fantastic opportunity to not only get more homes built but also promote new and innovative approaches to construction and design”.
The agreement with Barclays forms part of the government’s wider commitment to increase the pace of housing delivery in England. Ministers have stated their ambition to achieve 300,000 new homes a year by the mid-2020s, after 217,000 homes were built last year – the largest increase in housing supply in England for almost a decade.
A minimum of 10 homes must be built in each development to make it eligible for funding, which will be open to both Barclays and non-Barclays customers. Borrowers will be asked to show reasonable evidence that their scheme would not progress, or would not progress as quickly, without Housing Delivery Fund support, or evidence that the scheme aids innovation. Nick Walkley, Chief Executive of Homes England, hopes this will “drive a dynamic and competitive marketplace”.
The Chairman of Homes England, Sir Edward Lister, said that his organisation had been established to do things differently to increase the pace, scale and quality of new homes, and that the Housing Delivery Fund “demonstrates Barclays’ commitment to the residential sector, providing a new funding stream for SME developers to help progress sites and deliver more affordable homes across England”.
Dennis Watson, Head of Real Estate at Barclays Corporate Banking, said: “We are delighted to be working with Homes England to provide funding solutions that will deliver more homes. Through our combined experience and expertise in residential development, we feel positive that we can help more developers deliver the homes our communities need.”things differently to increase the pace, scale and quality of new homes, and that the Housing Delivery Fund “demonstrates Barclays’ commitment to the residential sector, providing a new funding stream for SME developers to help progress sites and deliver more affordable homes across England.”