Department for Communities and Local Government
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£100 million boost for small housebuilders

Small builders will benefit from a £100 million cash boost to recognise and support their important role in keeping the country building, Housing Minister Brandon Lewis said yesterday (6 July 2015) .

The Housing Growth Partnership will act as a dedicated initiative that will invest alongside smaller builders in new developments, providing money to support their businesses, helping get workers onto sites and increasing housing supply.

The Partnership will also establish a network of builders, including experienced developers, who will act as mentors and advisers to those looking to expand and grow their businesses.

Supporting small builders

In the last 25 years, the number of firms building between 1 and 100 units a year has fallen from over 12,000 to fewer than 3,000.

That’s why the government has placed housebuilding at the heart of its long-term economic plan, to get homes communities want built and create jobs in construction and related industries.

The latest housebuilding figures show starts have more than doubled since those seen during the same period in 2009 – with both starts and completions rising in the past year and the number of homes granted planning permission are at the highest annual total for 8 years.

Launched yesterday, the Housing Growth Partnership will help small builders to play their part in this success.

The government has matched a £50 million investment from Lloyds Banking Group to create the £100 million Housing Growth Partnership, which will be used to help smaller builders to invest in new projects and develop their businesses, allowing them to recruit and train skilled workers and become more competitive in their local area.

The partnership expects to make around 50 investments, with the aim to provide an additional 2,000 homes.

Housing Minister Brandon Lewis said yesterday:

The 2008 economic crash devastated our army of small builders, with delivery falling from 44,000 homes to just 18,000 – 7 years on, companies are getting back on their feet but we’re determined to give them all the help they need.

Access to finance is one of the biggest challenges they face – so that’s why today I’m launching this £100 million commitment which will help our smaller builders fund new projects, expand their businesses, create more jobs and build more homes.

With housing starts at a 7-year high and climbing and homes granted planning permission at 261,000 – the highest since 2007, this work will ensure we maintain this momentum and keep the country building.

Andrew Bester, Group Director and Chief Executive, Commercial Banking, Lloyds Banking Group said yesterday:

The challenge of housing supply and affordability is one of the biggest issues facing Britain today, so we at Lloyds Banking Group welcome the government’s announcement of support for the Housing Growth Partnership, which will double the capability to support SME house builders. It will provide SME house builders with much needed equity to support residential development projects, to stimulate growth in their businesses and facilitate access to conventional property development finance.

We believe building both a greater quantity and mix of homes will help Britain prosper and this partnership will help address the issue of housing supply in the UK.

Brian Berry, Chief Executive of Federation of Master Builders, said:

There has been a sharp decline in the numbers and output of SME house builders over the past 8 years. One of the biggest obstacles these firms have faced is a severe difficulty in accessing finance. Without adequate access to finance they cannot bring forward the number of new homes they would otherwise.

The new Housing Growth Partnership will directly help to address this issue and the additional £50 million greatly increases the scale of what can be achieved. We commend Lloyds Banking Group and the government on their trailblazing approach and we hope this marks a real turning point in the fight to provide adequate finance to the SME house building sector.

Further information

Housing Growth Partnership seeks to invest alongside the following:

  • small and medium sized house builders who have evidence of a solid track record in delivering residential development schemes

  • house builders who on average have 10-100 single unit completions annually over the past 3 years, and have a proven track record in land buying, design, construction, marketing and sales of new homes

  • the government’s investment supplements the initial £50 million announced by Lloyds Banking Group in October 2014

The Housing Growth Partnership will support residential development projects with a gross development value of between £0.75 million and £12 million and will offer investments in the range of £0.5 million - £5 million for each project.

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