New public money focussing on unlocking brownfield land to pave the way for up to 116,000 new homes has been announced by the government.
The £624m funding is available to all housebuilders particularly SMEs to help them pay for key infrastructure such as public transport and new schools as well as land remediation.
Housing minister Christopher Pincher said: “This money will build on our commitment to bring derelict and abandoned sites back to life, regenerating towns and cities as we level up across the country.”
Redeveloping underused land for new homes and improving public services is a key part of the government’s mission to level up and create communities where people want to live and work.
Homes England chief executive Peter Denton said: “This new infrastructure funding will be a powerful catalyst for creating new homes, places and communities.”
He said the resources would enable the government to back developments such as the regeneration of Rugby’s radio station site where 6,200 homes are to be built. The £35m public funding is going towards paying for a new primary and secondary school plus a link to the town centre.
But the National Federation of Builders, NFB, said while the loans were of some help the government still needed to improve the system.
NFB head of housing and planning policy Rico Wojtulewicz said: “Finance remains a challenge for SME builders and the home building fund does help some to access lending.
“However, it is still viewed by industry as bureaucratic and not appreciative of the staffing expertise difference between SMEs and large PLCs, plus doesn’t always offer as competitive rates as the market.”
Brokers Hank Zarihs Associates said development finance lenders could offer smaller housebuilders competitive rates on construction loans for developing brownfield land on well-located sites.
Gov’t hopes new loans will help smaller builders take on complex sites
This latest government funding is part of the £2.2 bn loan financing made available in last year’s spending review to support infrastructure and drive housing supply.
Homes England will administer the loans via the home building fund that makes finance available to developers.
In last month’s budget chancellor Rishi Sunak announced a further £1.8bn to regenerate brownfield land and deliver transport links and community facilities.
The funding boost meets the government’s manifesto commitment to a £10bn housing fund and will help unlock one million new homes.