Small builders have received a boost with the news that £100m is to be given to them as part of a joint investment with Lloyds Bank.
Announcing the news today, Housing Minister Brandon Lewis said that the Government is to match the £50m investment from Lloyds Banking Group to create the Housing Growth Partnership.
The partnership aims to help small builders to invest in fresh projects and expand their business. This in turn will enable builders to recruit more skilled tradesman and will hopefully see them become more established in their local area.
As a starting expectation, the partnership hopes to make around 50 investments, which they hope will lead to the provision of 2,000 homes. Additionally, the scheme aims to create a network of builders, who will then act of mentors to those looking to develop their business.
During the last 25 years, the number of firms building between 1 and 100 units per year has dipped from in excess of 12,000 to less than 3,000. However, latest figures show that building starts have increased at more than double than in 2009. Starts and completions were both found to have risen in the last year and the total number of homes given planning permission is currently at the highest level for 8 years.
‘The 2008 economic crash devastated our army of small builders, with delivery falling from 44,000 homes to just £18,000,’ said Mr Lewis. ‘7 years on, companies are getting back on their feet but we’re determined to give them all the help they need. Access to finance is one of the biggest challenges they face-so that’s why today I’m launching this £100 million commitment which will help our small builders fund new projects, expand their businesses, create more jobs and build more homes.’
Mr Lewis added that, ‘with housing starts at a 7-year high and climbing and homes granted planning permission at 261,000-the highest since 2007, this work will ensure we maintain this momentum and keep the country building.’
Andrew Bester, Chief Executive of Commercial Banking at Lloyds Banking Group believes, ‘the challenge of housing supply and affordability is one of the biggest issues facing Britain today.’ He said that Lloyds welcomed the Government’s support of the Housing Growth Partnership , adding that this, ‘will provide SME house builders with much needed equality to support residential development projects, to stimulate growth in their businesses and facilitate access to conventional property development finance.
‘We believe building both a greater quantity and mix of homes will help Britain prosper and this partnership will help address the issue of housing supply in the UK,’ Mr Bester added.
Brian Berry, Chief Executive of Federation of Master Builders noted, ‘there has been a sharp decline in the numbers and output of SME house builders over the past 8. One of the biggest obstacles these firms have faced is a severe difficulty in accessing finance. Without adequate access to finance they cannot bring forward the number of new homes they would otherwise.’
The new Housing Growth Partnership will directly help to address this issue and the additional £50 million greatly increases the scale of what can be achieved. We commend Lloyds Banking Group and the government on their trailblazing approach and we hope this marks a real turning point in the fight to provide adequate finance to the SME house building sector,’ he added.