New National Housing Bank to ‘Turbocharge’ Housebuilding

A NEW government-backed National Housing Bank could deliver 500,000 extra homes and unlock billions of private sector investment to ‘turbocharge’ housebuilding.

The publicly-owned bank will be a subsidiary of Homes England and is backed with £16bn of financial capacity which the government says will accelerate housebuilding and create more jobs.

The approach will allow Homes England to issue government guarantees directly and “have greater autonomy and flexibility to make the long-term investments that are needed to reform the housing market”.

It will also support SMEs with new lending products and enable developers to unlock large, complex sites through infrastructure finance.

Deputy Prime Minister and Housing Secretary, Angela Rayner, comments: “We‘re turning the tide on the housing crisis we inherited – whether that’s fixing our broken planning system, investing £39 billion to deliver more social and affordable homes, or now creating a National Housing Bank to lever in vital investment.”

New National Housing Bank

The bank will deploy some of the £2.5bn in low-interest loans announced in the latest Spending Review to support the creation of social and affordable homes, building on the government’s £39bn 10-year Affordable Homes Programme aimed at delivering 1.5 million homes.

The wider strategy includes £5 billion grant funding to boost housing supply on otherwise unviable sites and to support land assembly, remediation and up-front infrastructure delivery such as utilities and schools.

The bank will also back mayoral housing funds, with plans already in place to deliver thousands of new homes over the next ten years in London and Greater Manchester.

The Federation of Master Builders (FMB) says the creation of the National Housing Bank to provide finance to developers of many sizes to build homes is a ‘welcome step’.

Brian Berry, Chief Executive of the FMB, comments: “We know from our own data that a lack of finance is often cited as one of the top five issues holding back SME development, and that banks have historically been risk averse when it comes to lending to house builders. A new clear pathway like the National Housing Bank will give developers confidence to borrow. This is a bold change and sorely needed if the Government is to deliver its 1.5 million housing target. While details are still to be tied down it will be important that the new bank is able provide suitable finance options for smaller and micro house builders to help local economies thrive.”

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