Thursday, 18 September 2014

Details of £420m development fund revealed

The Homes and Communities Agency will seek to recover all investments made as part of its £420 million scheme to kickstart stalled housing projects by 2018.

As reported by Inside Housing earlier this month, the Get Britain Building Fund will include a combination of loans and equity investments, with no grant funding. Loans will be offered at ‘commercial rates’, with the HCA hoping to be repaid by March 2018.

The government today released details of the fund in a prospectus, which called for bids for funding from developers with ‘shovel ready schemes’ in England, capable of restarting on site in 2012 and completing by December 2014. Eligible sites must be have at least 25 homes.

Bids will be accepted from all private sector developers, but not councils unless they bid as part of a joint venture with a private partner.

Developments in London will be offered 20 per cent of the total funding available through the scheme.

Pat Ritchie, chief executive at the HCA, said: ‘This is an exciting new programme, which will boost the house building industry, local economies and the supply of new homes for the areas that need them. I’m sure this opportunity will be of interest to all developers, but we have made the process is as simple as possible to make it easy for smaller developers to bid.

‘I am looking forward to receiving the expressions of interest from the industry and the HCA will be taking a robust commercial approach working with local authorities to invest in the right schemes that deliver the greatest benefits for local communities and the industry.’

In his ministerial foreword to the prospectus, housing minister Grant Shapps said he was ‘particularly keen that small and medium sized builders can ask for funds’.

‘We need to get builders back on “shovel ready” sites,’ he added. ‘Work has stopped on too many building sites that local people walk by everyday – people who are in desperate need of new homes.’

Bidders have until 30 January to submit an expression of interest, which the HCA will assess alongside local authorities. Shortlisted projects will then enter a due diligence process before contracts are signed next May.

Readers' comments (10)

  • F451

    Yet another 'fix' to make sure Council's can not build homes for social rent. No money for Council's accept as part of a partnership with a private bidder, and borrowing to be at commercial rates.

    This may produce homes for the 'deserving' rich, but nothing for the 'undeserving' mimimum waged.

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  • Gavin Rider

    F451 - you are right, this has nothing to do with promoting social housing construction. It is about saving the construction industry as a whole. Affordable housing is getting a separate chunk of additional taxpayer subsidy.

    I wonder why Inside Housing thought it was worth reporting this here?

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  • F451

    So that you would know how the building at the end of your garden, when it starts, was funded Gavin - obviously!

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    (Excludes Scotland, Wales and Northern Ireland)

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  • Aeodwrath

    I assume the 25 unit minimum is to bring all proposed schemes within the affordable housing threshold so, as long as local authorities hold developers to their affordable housing policies, 20% I assume will be offered to HA's under S.106.

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  • F451

    You assume much young warrior.

    You'll find that the 25 unit minimum recognises that large developers will laugh at the commercial rate loan offer and continue with their negotiated rate, recognises that small developers pose too great a risk against default, and the project value would look low in respect to the loan recovery, thus sets the 25 unit qualifier as small enough to be desparate enough for commercial rate lending (even though the government could offer more generous terms) but not so small as to risk default loss.

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  • Gavin Rider

    F451 - nice try, but my house is surrounded by other houses on all sides already, and there isn't room to build anything more than a shed in my back yard even if someone wanted to.

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  • F451

    Flumoxed in the end - never mind, close the curtains and pretend that none of those other homes are there.

    Meanwhile - have a well deserved break, a great family Christmas, before picking up the cudgel of action again in the New Year.

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  • Gavin Rider

    F451 - same to you.

    I am about to sit down and relax with a copy of the 8th Report of Session 2010-12 on the National Planning Policy Framework which has just arrived through my letterbox. Should make an interesting alternative to the naff movies being shown on TV over Christmas.

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  • F451

    Bless you Gavin.

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