Barclays has announced that it is working with the UK Government to provide £1bn of development finance to go towards the construction of thousands of new homes across England to help improve housing provision and support smaller developers.
At present, almost two-thirds of homes are built by just ten companies. The scheme, named The Housing Delivery Fund, will focus on helping small or medium-sized developers access the funds needed to build housing in the hope of diversifying the housing market. Developers will be able to access loans ranging from £5 million to £100 million for projects, including building on brownfield land and urban regeneration projects.
Of the £1bn fund, Barclays is providing £875m and Homes England, the Government’s national housing agency, will contribute the remaining £125m.
Solving the housing crisis
Currently, the UK is facing a housing shortfall. According to research by Heriot-Watt University, 340,000 new homes would need to be built in England each year until 2031 in order to sufficiently meet the need for new housing. This is higher than current government targets to build 300,000 new homes a year by the mid-2020s.
Although last year saw the biggest increase in housing provision in England for almost a decade, with 217,000 homes built, a greater increase is needed to meet demand.
Housing Secretary Rt Hon James Brokenshire MP believes that giving smaller builders the means of funding new developments is one way to remedy the shortage:
“My priority as Housing Secretary is to get Britain building the homes our country needs. This new fund – partnering Homes England with Barclays – is a further important step by giving smaller builders access to the finance they need to get housing developments off the ground.
“This is a fantastic opportunity to not only get more homes built but also promote new and innovative approaches to construction and design that exist across the housing market.”
Although the scheme will cover ‘social housing, retirement living and the private rented sector’, it is currently unclear whether it will include provisions for affordable housing.
Barclays’ Chairman John McFarlane described the need for new housing as “urgent”:
“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.
“We are very pleased to be working with government to get the country building more homes, more quickly.”