A new ‘National Housing Bank’ is to help deliver more than half a million extra homes, the Government has claimed.

The publicly-owned bank will leverage £53 billion in additional private investment to housebuilding, ministers say, as they ramp up efforts to hit their 1.5 million new homes target. They claims the new investment will ‘turbocharge’ construction work.

Insolvency

With reports last week that half of Britain’s 2,500 smaller housebuilders could collapse into insolvency in the next few years due to the cost of industry regulations, the extra cash may be badly needed.

The new bank, which will be a subsidiary of Homes England, the national housing and regeneration agency, will be able to issue government guarantees to companies looking to invest in housebuilding.

Support

It will support SMEs with new lending products and enable developers to unlock large, complex sites through infrastructure finance.

Angela Rayner, Deputy Prime Minister and Housing Secretary (main picture), says: “We‘re turning the tide on the housing crisis we inherited – whether that’s fixing our broken planning system, investing £39 billion to deliver more social and affordable homes, or now creating a National Housing Bank to lever in vital investment.”

And Chancellor Rachel Reeves says: “As part of our Plan for Change, the new National Housing Bank will unlock £53 billion of additional private investment—giving more working people the security of home ownership and investing in Britain’s renewal.”

Industry reaction

Paul Rickard, CEO at first-time buyer developer Pocket Living, says: “We particularly welcome the recognition of the importance of SME developers with one of the banks focus’ being new funding options for SMEs and the freedom for the public and private sector to innovate together to deliver more homes.

Nathan Emerson, CEO at Propertymark, says: “On the face of things, the news of the introduction of the National Housing Bank is much welcome and will inject a desperately needed boost into both the general housing stock and incentivise investment within the private rented sector.

“We look forward, however, to receiving the finer details of how and who can access this funding.

“For years now, undersupply has caused affordability issues across both the sales and rental market especially within the private rented sector, which has been crippled with rapidly growing demand and a slowing in investment.

“Therefore, we hope that this injection unlocks enough support for homebuilders and private investors to meet demand well into the future.”

Industry support

A RICS spokesperson, says: “The launch of a National Housing Bank is an exciting innovation which could propel much-needed investment into housebuilding. The industry, and especially SMEs, need all the support they can get for the country to build.

“Confidence is key if the Government is to meet its 1.5 million home target and new streams of investment and support should invigorate new and existing projects.

“Crucially, this announcement includes a £5 billion grant for infrastructure and land. This investment should help ensure that we not only build new homes but also essential utilities and social services, such as schools; making them places people want to live in that do not strain existing infrastructure.”

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