The government is pledging £3bn of public money to accelerate the building of thousands of homes in the UK.
The home building fund will provide loans for building projects where finances are tight. Chancellor Philip Hammond said: “We’ll use all the tools at our disposal to accelerate housebuilding and ensure that over time, housing becomes more affordable.”
The home building fund will release £1bn of short-term loans for small builders, custom builders and innovative developers to deliver 25,500 homes by 2020. A further £2bn of long-term funding for infrastructure will unlock up to 200,000 homes over the long term.
Builders will be encouraged to use more modern building techniques in the hope of delivering homes twice as quickly. The new rules will make it easier for developers to demolish offices, and replace them with residential housing.
The government published guidance outlining more details of the fund this week. It revealed that the most successful applicants will get loans of between £250,000 and £250m, and smaller loans will be available for ‘innovative’ housing for custom builders. Loans for development work will typically cover five years, and infrastructure loans will cover 20 years.
In order to be eligible for the funding, applicants must:
- Demonstrate that without the loan the scheme would not progress quickly, if at all
- Show that the development will be in England
- Be a private sector organisation with a majority stake in the site it seeks funding for
- Build a minimum of five homes
Mark Hodgkinson, chief executive of the Homes and Communities Agency, said: “From today, builders and investors just need to give us a call to start discussing funding for new homes. Our dedicated team will also provide expert ongoing support to new entrants to the sector and those companies proposing innovative solutions to speed up housebuilding.”
Posted on Wednesday, October 12, 2016