Small and medium-sized builders are now able to access construction loans of between £1m and £10m from a new fund, the Government’s housing delivery agency has announced.
Homes England has joined with United Trust Bank (UTB), an established specialist lender, to offer a £250m fund to support small and medium enterprise (SME) builders with development finance at up to 70% Loan to Gross Development Value.
The Housing Accelerator Fund aims at improving access to finance offered to smaller builders and driving the diversification of the housing market.
‘In line with Homes England’s commitment to support SMEs, it will help smaller builders get on and build now, as well as improve the lending landscape for SMEs by driving competition in the market, improving choice and encouraging innovation,’ said Gordon More, chief investment officer, Homes England.
‘United Trust Bank have consistently supported housebuilders of all sizes and are an experienced and capable lender, we’re pleased to be collaborating with them on this long-term partnership and look forward to seeing the fund support the delivery of new homes across the country.’
The fund opened yesterday for applications and prospective borrowers should contact UTB.
Noel Meredith, executive director, UTB commented: ‘SME housebuilders have a vital role to play in delivering the UK’s new housing needs and UTB has amassed considerable experience helping such businesses to complete thousands of successful developments.
‘This is an exciting new partnership with Homes England which will make a real difference to both long established and newly formed development companies requiring competitive funding and the long-term support of a knowledgeable and experienced specialist lender.
‘This alliance will help to reinvigorate and increase diversity in the SME housebuilding sector, and boost housing supply in areas under the greatest affordability pressures.’
Commenting on the announcement, housing minister Christopher Pincher said: ‘It is a top priority for this Government to build the homes this country needs and it is vital for our economic recovery that we support as many as possible within the house-building industry to deliver these homes.
‘I welcome the announcement of the alliance between Homes England and United Trust Bank – this is win-win. It will not only support our commitment to build more homes, but also give smaller developers easier access to finance.’