Lloyds Banking Group and the Government have confirmed investments from the £100m Housing Growth Partnership as part of a drive to increase the supply of new homes and provide much needed capital into the UK’s house building sector.
The partnership, launched in July 2015, is a dedicated joint venture between the Government and Lloyds Banking Group which invests between £500,000 and £5 million in housing developments alongside smaller builders.
Both the Government and Lloyds Banking Group have put £50m into the pot and expect to make around 50 investments and provide an additional 2,000 UK homes over three years.
Campbell Buchanan, a Cambridgeshire based house builder has secured £1.7m, one of the first investments from the Partnership which will fund the development of 40 new homes in Brington, Cambridgeshire. Debt facilities have been provided by Heritable Development Finance, part of One Savings Bank.
Campbell Buchanan has recently successfully completed the first phase of its Brington development and will now focus on the remainder of the development which is expected to be welcoming its first homeowners by spring 2017.
Andrew Hulme, CEO of the Housing Growth Partnership says: “The supply of housing is a key concern in relation to the UK’s long-term prosperity and small and medium-sized housebuilders are fundamental in helping close that gap.
“Campbell Buchanan is a highly experienced operator with a passion and a proven track record of building high-quality developments. This investment will support the next phase of the Brington development and help them achieve their growth ambitions more quickly.”
£100m to boost small homebuilders
6th July 2015
A £100 million cash boost will support small builders in the UK. 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.
The funding follows a striking plunge in the small building sector: 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.
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 at the highest annual total for 8 years.
The government has matched a £50 million investment from Lloyds Banking Group to create the £100 million partnership. The government expects it to make around 50 investments, with the aim of providing an additional 2,000 homes.
“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,” comments Housing Minister Brandon Lewis.
Andrew Bester, Group Director and Chief Executive, Commercial Banking, Lloyds Banking Group, adds: “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.”