Our post earlier this week looked at the key points for the housing sector from the budget.  One of the measures, that hasn't yet had much focus, is the promise of financial guarantees to support lending, with the aim of encouraging small and medium size housebuilders to build more homes.

A £1 billion partnership with Barclays, to be known as the "Housing Delivery Fund", was announced earlier in the year and will be administered by Homes England. Barclays is expected to offer more generous lending terms than are otherwise available, giving smaller housebuilders access to more funding.

This comes on the back of an inquiry into how small housebuilders can be encouraged to develop more, following a dramatic reduction in new homes delivered by such organisations (falling from around 12,000 in 1998 to 2,500 today).  One of the findings of the inquiry was that guarantees would allow smaller housebuilders to scale up, grow and deliver new homes. 

What this doesn't do, however, is reduce the risk of smaller development projects, which often have tight profit margins making the schemes unattractive.   That is why some of our innovative RP clients are entering into exciting new partnerships that support smaller housebuilders - increasing the supply of new homes and ensuring that there are a number of housebuilders in their local areas, rather than being reliant on a few national operators.

Get in touch for more information.