A new £3 billion fund to help build more than 225,000 new homes has been announced by the Government because “quite simply, we’re not building enough,” chancellor Philip Hammond told the Conservative Party conference today.
In an effort to tackle the housing crisis, communities secretary Sajid Javid says the Home Builders Fund will provide £1 billion of short-term loan funding for small builders, while a further £2 billion investment will accelerate construction on public land.
And the creation of the dedicated fund to help SME housebuilders to deliver 25,500 homes by 2020 has been welcomed by the Federation of Master Builders (FMB).
Brian Berry, chief executive of the FMB, said: “We welcome the Government’s renewed focus on housebuilding and its recognition that without a resurgent SME sector, there’s little prospect of the country tackling its chronic under-supply of new homes.
“The launch of a £3 billion Home Builders Fund, a significant part of which will be specifically targeted at supporting small scale developers, will tackle one of the key barriers to SME house builders – a lack of access to finance.
According to Berry, one in two local house builders cite difficulty accessing finance as a major barrier to their ability to build more homes, and this demonstrates “the latent potential of a sector that can play a much larger role in tackling the gap between supply and demand of new homes,” he says.
Berry admits this problem is particularly pronounced for the smallest firms and new entrants.
“It’s therefore critical that the new fund is made accessible to firms that will not want to engage with lengthy bureaucratic processes. Some Government funding schemes have been previously available to smaller developers, but received relatively poor take up due to the perceived complexity of applying, and the challenging timescales for delivery and repayment.
“The Government will need to work closely with industry to ensure that this policy is delivered in a way that is accessible and that enables both existing SMEs and new entrants to make maximum use of such a substantial fund. If the Government get the details of this fund right, we would hope that the anticipated building of 25,500 homes over the course of this Parliament could act as a real catalyst for a much wider revival of SME house builders.”