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Homes England and Lloyds launch fresh £300m fund for small house builders
A Homes England and Lloyds Bank partnership has unveiled £300m more in support for small house builders, to help develop 10,000 new homes by 2025.
Homes England and Lloyds have committed an additional £300m in equity to its social impact investor, which aims to support the development of 10,000 new homes by 2025 #UKhousingSmall and medium-sized enterprises (SMEs) and regional house builders will be able to access the equity funding under the latest iteration of the Housing Growth Partnership (HGP), a social impact investor launched by the government agency and Lloyds in 2016.
The new fund will support a wider range of tenures than the original HGP, including build to rent, regeneration and retirement living.
Lloyds will provide £180m in equity to the new fund and Homes England will contribute £120m.
The fund will also be broadened to enable investment into larger house-building projects with a development value of up to £75m.
Developers building between five and 500 units are eligible for the fund, which will provide a maximum of £10m per investment.
Priority will be given to projects with a greater sustainability focus, as well as those using modern methods of construction and other “evolutionary” construction methods.
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Housing minister Christopher Pincher said the new fund “will help smaller and regional house builders by providing them with the financial support necessary to deliver much-needed new homes”.
Since its launch, the HGP has invested alongside 46 house builders to support the delivery of more than 4,568 new homes, nearly half of which have completed.
The new fund will also establish a regional growth initiative, under which the HGP will commit a higher level of equity funding to some SME builders over a defined period to allow them to “invest in their businesses and target larger and more strategic sites”.
Vic Hepburn, chief executive of the Housing Growth Partnership, said the regional growth initiative will allow the fund “to support the most ambitious house builders in a more substantial way with additional financial and strategic support”.
The first five regional partnerships, with Genesis Homes, Durkan Homes, Stonewood Partnerships, Briar Homes and Cruden Homes, are already in place across four regions of the UK.
Harry Swales, chief investment officer at Homes England, said: “By injecting this additional investment and harnessing Lloyds Banking Group’s commercial skills, we’re able to diversify the market, support increasing numbers of builders and provide the homes the country needs.”
It emerged last month that Lloyds Bank is aiming to become a 50,000-home landlord in the private rented sector over the next decade through its Citra Living brand.
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