A new fund announced last week, the Housing Growth Partnership II (HGP), is aiming to support the development of new homes by 2025.
Housing Growth Partnership, which has been established by Lloyds Banking Group and Homes England, has announced a new £300 million commitment to SMEs and regional housebuilders within the UK. This partnership aims to bridge the homebuilding funding gap. The new funds will allow homebuilders to build more residential properties throughout the UK as well as growing their businesses.
The new funding will support a wide range of housing tenures to meet the UK’s diverse and evolving housing needs. Building upon the success of the first HGP funding, announced in 2016, this new £300 million commitment will help the partnership achieve its target of supporting 10,000 new homes by 2025.
Housing Minister Christopher Pincher said: “It is a top priority of this Government to increase housing supply so hard-working people can be helped into home ownership.
“A thriving SME sector is crucial to our housebuilding targets and ambitions. This significant amount of funding will help smaller and regional housebuilders by providing them with the financial support necessary to deliver much-needed new homes.”
The fund will be broader in scope to enable investment into larger housebuilding with a development value of up to £75 million. It will also offer support for the delivery of a wider range of housing projects, including Build to Rent Regeneration and Retirement Living. The partnership will also look to prioritise projects with a greater sustainability focus, along with those using modern methods of construction (MMC) and other revolutionary construction methods.
Since its launch, HGP has invested alongside 46 housebuilders to support the delivery of 4,568 new homes, with nearly half now completed and sold to families across the UK.
Regional Growth Initiative
The HGP fund will also partner with the most ambitious SME housebuilders in the UK to support their growth and development through its new Regional Growth Initiative. This scheme will see HGP committing a higher level of dedicated equity support to these housebuilders over a defined period, to allow them to invest in their businesses and target larger and more strategic sites.
The first five regional partnerships are already in place across four different regions of the UK, with Genesis Homes, Durkan Homes, Stonewood Partnerships, Briar Homes and Cruden Homes.
The Regional Growth Initiative is being rolled out UK wide with the aim of trying to support the next generation of large regional housebuilders.
Support for the housing market
This announcement is part of Lloyds Banking Group’s commitment to helping Britain recover by working across the market to expand the availability of high-quality and affordable homes. As well as being one of the biggest backers of housebuilders in the UK, the Group has also committed over £9 billion of funding to the social housing sector since 2018. The UK not only needs more homes, but also to make them greener, so Lloyds Banking Group is supporting the creation of national sustainability standards for housebuilding finance and has assessed the energy retrofit requirements of over 240,000 homes in the social housing sector.
The launch of Citra Living earlier this year marked the Group’s entry into the private rental market, building on its existing support for the buy to let sector. The Group remains committed to helping first-time buyers realise the dream of home ownership, with £9 billion in lending already provided this year and a commitment to reach £10 billion by the end of the year.
Vic Hepburn, CEO of Housing Growth Partnership, said: “We are pleased to be building on the success of the Housing Growth Partnership by extending the range of support we can provide to the UK housebuilding market. This includes our new multi-tenure approach, which will provide more flexibility for housebuilders and more choice for homebuyers.
“The introduction of the Regional Growth Initiative will also allow the Housing Growth Partnership to support the most ambitious housebuilders in a more substantial way with additional financial and strategic support.”
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