Government launches ‘National Housing Bank’ to back smaller builders and housing projects

The government has introduced a publicly owned National Housing Bank aimed at supporting small housebuilders and ensuring reliable funding for housing developments.

Small and medium-sized enterprises (SMEs) will receive backing through lending partnerships with private sector collaborators. The bank will also facilitate revolving credit facilities to help SMEs accelerate the delivery of new homes.

Operating as a subsidiary of Homes England, the bank will collaborate closely with mayors and local authorities.

The bank plans to provide around £2.5 billion in low-interest loans to support the construction of social and affordable housing. It will also offer infrastructure financing and guarantees to assist with large, complex development sites.

Additionally, the bank will invest in partnerships designed to attract more institutional capital into housing and mixed-use projects. Notable collaborations include the Schroders Real Estate Impact Fund, the MADE Partnership with Lloyds Bank Group and Barratt Developments, the HABIKO joint venture with PIC and Muse, and a public-private partnership involving Oaktree Capital and Greycoat Real Estate.

Government Statements

Angela Rayner, Deputy Prime Minister and Housing Secretary, stated:

“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.

“This government is delivering reform and investing in Britan’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.”

The initiative also includes £5 billion in grant funding for infrastructure and land through the National Housing Delivery Fund.

A spokesperson from the Royal Institution of Chartered Surveyors (RICS) commented:

“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.

“This is another piece of the puzzle, alongside planning reform and skills investment which should work lockstep to deliver on the ambitious targets the government put in place last year.”

The government is also preparing to release its 10 Year Infrastructure Strategy, outlining a £725 billion plan to rebuild the UK.

Rachel Reeves, Chancellor of the Exchequer, 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.

“Because we reformed our fiscal rules, we can invest through government-backed institutions, like the new National Housing Bank, to attract private investment and make sure money flows into projects that deliver real benefits for working people and communities.

“The Bank will help unlock a wide range of sites, including larger ones which struggle to get up front lending given their risk and complexity, using a mixture of equity investment, loans and guarantees to leverage global institutional capital into UK housing, reducing risk at the early stages of development.

“It will also support SME lending by establishing additional lending alliances with private sector partners and leverage in additional capital and expertise, including providing revolving credit facilities to help SMEs to grow and build out their housing pipeline more quickly.

“This follows proposals previously announced to bolster the capabilities of SME developers, which provide local jobs and train construction apprentices, by streamlining and simplifying overly complex planning rules.”

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