The government has confirmed £3bn in additional housing guarantees for SME housebuilders will be available from today, widening access to finance from banks and lenders.
The guarantees were announced at the Budget and aim to reduce the risk for lenders, which is expected to encourage them to increase the credit available to SME housebuilders and the build to rent sector.
This includes doubling the ENABLE Build scheme to £2bn, so smaller housebuilders and firms can develop more than 10,000 new homes, including student accommodation and specialised housing for older people.
The scheme is backed by the British Business Bank.
Louis Taylor, CEO of British Business Bank, said: “We welcome this £1bn expansion of the bank’s ENABLE Build programme by the government. Unlocking finance for smaller housebuilders is more important than ever, not just to help build homes across the UK’s nations and regions and provide people with security, but also to stimulate much-needed growth for the UK economy.
“Combined with the ENABLE Build programme’s recent expansion to include provision to non-bank lenders, this means that the sector will benefit from both an increased volume and choice of finance.”
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For build to rent developers, the Private Rented Sector Guarantee Scheme will be reopened at the end of the year, with almost £2bn available to boost housebuilding.
The government said more kinds of projects will be able to access lending to enable more developments to be completed without delays.
Richard Green, partner at Venn Partners, said: “Build to rent can play a key role in the UK’s private rented sector, delivering high-quality, well-managed homes funded by institutional investors. Venn looks forward to continuing to support the sector with attractive loans from the PRS Guarantee Scheme”.
Based on the performance of each scheme so far, it has been estimated that the increase in guarantees will support the delivery of more than 20,000 homes.
Matthew Pennycook, housing and planning minister, said: “SME housebuilders and build to rent operators have a crucial role to play in delivering the government’s target of 1.5 million new homes in this Parliament.
“The significant additional support provided by our housing guarantee schemes will enable them to access low-cost loans and support the building of thousands of new homes across the country.”
