As the demand for new homes continues to rise resulting in widening gap between supply and demand in the UK, the government is coming up with innovative ideas. The role of the private sector in bridging this gap between demand-supply is of paramount importance. Recognising the role being played by the private sector in house building in England, the government has announced a fresh initiative.
The government announced a new partnership with the Barclays Bank to provide £1 billion of loan finance to the stakeholders of the housing sector. The announcement comes at a right time, especially when the demand for quality homes is growing at an exponential rate across England. The stakeholders of the housing sector have not been able to meet the demand while the number of aspiring home owners to growing year-on-year.
The deal will help support small and medium sized developers, speeding up the delivery of thousands of new homes planned across England. Support, ranging between £5 million to £100 million, will be made available to those developers, who are able to demonstrate the necessary experience and commitment to building excellent new homes, whilst boasting a track record of delivering challenging projects on time and to target.
Overseen by the Government’s delivery agency Homes England, the funding will put greater emphasis on opening up the housing market, which sees almost two-thirds of new homes built by just 10 companies at present.
The Housing Delivery Fund will support the delivery of new homes, including social housing, retirement living and apartments for rent, whilst also encouraging greater innovation on how housing is delivered such as brownfield land and urban regeneration projects.
The agreement with Barclays forms part of the government’s wider commitment to increase the pace of housing delivery in England. The ministers have been clear on their ambition to achieve 300,000 new homes a year by the mid-2020s, which follows 217,000 homes built last year, the biggest increase in housing supply in England for almost a decade.
It is heartening to note that the government is actively engaging and involving the private sector in addressing the housing crisis in England. In the last five years, the contribution of the private sector to new build homes is significantly greater than other sources in the UK. This new fund will certainly help address the housing crisis from the long-term perspective.
The Ministry of Housing, Communities & Local Government, Homes England, should come out with more such initiatives to help buyers step on to the property ladder.