Over 500,000 new homes are set to be built through the newly announced National Housing Bank, backed by the Government.
The National Housing Bank, set up as a subsidiary of Homes England, will have £16bn of financial capacity, on top of £6bn already allocated this Parliament.
The aim is to speed up housebuilding and bring in an extra £53bn from private investors, supporting more than 500,000 homes and new jobs.
The bank will have the power to issue Government guarantees and will have more flexibility to make long-term investments, aiming to bring stability for developers and investors.
It will also offer new lending products for small and medium-sized enterprises (SMEs) and help unlock large, complex sites through infrastructure loans.
Deputy Prime Minister Angela Rayner said: “We‘re turning the tide on the housing crisis we inherited – whether that’s fixing our broken planning system, investing £39bn to deliver more social and affordable homes, or now creating a National Housing Bank to lever in vital investment.
“This Government is delivering reform and investing in Britain’s renewal through our Plan for Change.
“Our foot is firmly on the accelerator when it comes to making sure a generation is no longer locked out of homeownership – or ensuring children don’t have to grow up in unsuitable temporary accommodation, and instead have the safe and secure home they deserve.”
Some of the £2.5bn in low-interest loans announced at the Spending Review will be used by the bank to help build social and affordable homes.
The scheme builds on the £39bn investment for a new 10-year affordable homes programme, with a goal to build 1.5 million homes.
Chancellor Rachel Reeves said: “Our Spending Review last week delivered the biggest cash injection into social and affordable housing in 50 years as we progress on our promise to build 1.5 million homes.
“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.”
Homes England chair Pat Ritchie said: “Establishing the National Housing Bank, as a part of Homes England, builds on the Agency’s expertise at providing a wide range of finance to partners and places to unlock the delivery of new housing and mixed-use schemes.
“The National Housing Bank also responds to calls from the housing sector, mayors and local leaders to increase the scale of available public and private finance for housing and regeneration, provide a broader range of flexible debt, equity and guarantee products, and enable more timely decision making.”
The Government said it will work with the mayor of London to set up a city hall developer investment fund and support regeneration around London Euston, aiming for 80,000 homes a year in the capital.
In Greater Manchester, the housing investment loan fund will be extended to support thousands of new homes over 10 years.
A new national housing delivery fund will provide £5bn in grant funding for infrastructure and land, to support sites that need upfront investment for things like utilities and schools.
Reaction:
Paul Rickard, CEO at Pocket Living:
“The creation of this National Housing Bank, alongside the recent spending review and other policy announcements, is a huge boost for housing delivery.
“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.
“We have been working closely with government to ensure that the SME sector has capacity, certainty, and flexibility and we are delighted this is now being delivered.”
Stephen Teagle, CEO, partnerships and regeneration at Vistry Group:
“This announcement underlines the government’s commitment to use all the tools available to drive delivery and tackle the housing crisis head-on.
“Establishing the new National Housing Bank as a subsidiary of Homes England will help bring schemes forward at pace, ensure alignment with other programmes and gain traction with developers and investors keen to leverage investment and drive delivery.
“It recognises that long-term place making and long-term investment go hand in hand. Paired with last week’s measures this is further evidence of a government with an innovative and clear-sighted focus on addressing the years of under supply of new homes to build vibrant communities for the future.
“Through Vistry’s unique partnerships model, we look forward to continue working with Homes England and all our partners to maximise the benefits of this new initiative.”
Charlie Nunn, group CEO at Lloyds Banking Group:
“A new National Housing Bank as part of Homes England is a powerful commitment towards building essential housing across the UK, at pace and at scale.
“As the MADE partnership between Lloyds Banking Group and Homes England demonstrates, by providing greater certainty and risk-sharing for developers, SME housebuilders, regional and local authorities, while strengthening public-private partnerships for institutional investors, we can accelerate the flow of private finance and deliver more homes in the places they’re needed most.”
Greg Reed, CEO at Places for People:
“The catalytic combination of a generationally significant affordable programme and the creation of a National Housing Bank is truly game changing for the provision of social housing in this country.”
Kate Henderson, CEO of the National Housing Federation:
“The National Housing Bank is another welcome, innovative initiative from the government and a clear statement of intent on fixing the housing crisis.
“Alongside the ambitious new Affordable Homes Programme and the long-term certainty provided by the new rent settlement announced at the Spending Review, the £2.5bn low-cost loans for social housing providers will bolster our sector’s capacity to get building.
“We will continue to work with the government to deliver the truly affordable homes so many people across the country need.”
Nathan Emerson, CEO at Propertymark:
“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.
“We would urge the UK Government to ensure its finger remains on the pulse, that support is given to all tenures and that it looks to fully bridge the shortfall in order to tackle this issue with longevity in mind.
“As well as this, a review of Stamp Duty thresholds and taxes imposed on landlords is also needed to address some of the barriers affecting affordability and investment.”
