£16bn of new public investment will help build over 500,000 new homes, unlocking over £53bn of private investment, as part of the government's Plan for Change
Hundreds of thousands of extra homes will be delivered thanks to a bold new government-backed 'housing bank' that will unlock billions in private sector investment to turbocharge housebuilding.
The National Housing Bank, a subsidiary of Homes England, will be publicly owned and backed with £16 billion of financial capacity, on top of £6bn of existing finance to be allocated this Parliament, in order to accelerate housebuilding and leverage in £53 billion of additional private investment, creating jobs and delivering over 500,000 new homes.
The trailblazing approach will see Homes England, the national housing and regeneration agency, able to issue government guarantees directly and have greater autonomy and flexibility to make the long-term investments that are needed to reform the housing market and deliver strong returns.
With long-term, flexible capital, the National Housing Bank will be able to act as a consistent partner to the private sector, bringing the stability and certainty that housing developers and investors need to make delivery happen. It will also support SMEs with new lending products and enable developers to unlock large, complex sites through infrastructure finance.
Deputy Prime Minister and Housing Secretary Angela Rayner:
"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 Britain'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 Bank will deploy some of the £2.5 billion in low-interest loans announced at the Spending Review to support build social and affordable homes.
It builds on £39 billion investment announced at the Spending Review for a new 10-year Affordable Homes Programme, which is the biggest boost to social and affordable housing investment in a generation, supporting our Plan for Change milestone to build 1.5 million homes.
This comes ahead of the government's 10 Year Infrastructure Strategy to be published tomorrow. The strategy will set out a £725 billion plan to rebuild the UK over the coming decade, bringing together for the first time economic, social and housing infrastructure.
Chancellor of the Exchequer, Rachel Reeves, 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.
Homes England Chair Pat Ritchie said:
"Establishing the National Housing Bank, as a part of Homes England, builds on the Agency's expertise at providing a wide range of finance to partners and places to unlock the delivery of new housing and mixed-use schemes.
"The National Housing Bank also responds to calls from the housing sector, mayors and local leaders to increase the scale of available public and private finance for housing and regeneration, provide a broader range of flexible debt, equity and guarantee products, and enable more timely decision making."
The government will also work with the Mayor of London to establish a City Hall Developer Investment Fund, and support housing regeneration around London Euston, to help deliver London's ambition to build around 80,000 homes per year. In Greater Manchester, the Housing Investment Loan Fund will be extended to deliver thousands of new homes over the next ten years.
A programme of investment including £5 billion grant funding for infrastructure and land from the new National Housing Delivery Fund will complement capital investment from the National Housing Bank. This package will drive growth and transform places, boosting housing supply on otherwise unviable large and complex sites, and support land assembly, remediation and up-front infrastructure delivery such as utilities and schools.
Paul Rickard, Chief Executive Officer, Pocket Living:
"The creation of this National Housing Bank, alongside the recent spending review and other policy announcements, is a huge boost for housing delivery. We particularly welcome the recognition of the importance of SME developers with one of the banks focus' being new funding options for SMEs and the freedom for the public and private sector to innovate together to deliver more homes. We have been working closely with government to ensure that the SME sector has capacity, certainty, and flexibility and we are delighted this is now being delivered."
Stephen Teagle, CEO, Partnerships & Regeneration, Vistry Group:
"This announcement underlines the government's commitment to use all the tools available to drive delivery and tackle the housing crisis head-on.
"Establishing the new National Housing Bank as a subsidiary of Homes England will help bring schemes forward at pace, ensure alignment with other programmes and gain traction with developers and investors keen to leverage investment and drive delivery. It recognises that long-term place making and long-term investment go hand in hand. Paired with last week's measures this is further evidence of a government with an innovative and clear-sighted focus on addressing the years of under supply of new homes to build vibrant communities for the future.
"Through Vistry's unique partnerships model, we look forward to continue working with Homes England and all our partners to maximise the benefits of this new initiative."
Phil Mayall, Managing Director, Muse Places:
"Today's announcement is hugely exciting for the regeneration and housing sector. Muse has long advocated the need for a longer-term, partnership approach to the delivery of housing in areas of most need and the new National Housing Bank achieves this at scale. We very much look forward to working in partnership with the Bank and the Government to deliver at pace."
Charlie Nunn, Group Chief Executive, Lloyds Banking Group:
"A new National Housing Bank as part of Homes England is a powerful commitment towards building essential housing across the UK, at pace and at scale. As the MADE partnership between Lloyds Banking Group and Homes England demonstrates, by providing greater certainty and risk-sharing for developers, SME housebuilders, regional and local authorities, while strengthening public-private partnerships for institutional investors, we can accelerate the flow of private finance and deliver more homes in the places they're needed most."
Greg Reed, CEO, Places for People:
"The catalytic combination of a generationally significant affordable programme and the creation of a National Housing Bank is truly game changing for the provision of social housing in this country."
Kate Henderson, Chief Executive of the National Housing Federation:
"The National Housing Bank is another welcome, innovative initiative from the government and a clear statement of intent on fixing the housing crisis. Alongside the ambitious new Affordable Homes Programme and the long-term certainty provided by the new rent settlement announced at the Spending Review, the £2.5bn low-cost loans for social housing providers will bolster our sector's capacity to get building. We will continue to work with the government to deliver the truly affordable homes so many people across the country need."
Notes:
· The Bank will be publicly owned and designated as a Public Financial Institution (PuFin) to make a long-term return for government aligned with the requirements set out in the 2025 Financial Transaction Control Framework. It will give the housing sector the certainty, flexibility and the capacity to deliver at scale, and will work with mayors and local leaders to back housing projects that meets regional priorities.
The National Housing Bank will:
Provide a wider range of debt, equity and guarantee products that support SMEs to accelerate their housebuilding and grow their businesses more rapidly.
Expand the use of lending alliances with the private sector, which significantly increases access to finance for housebuilders.
Support the unlocking of large and complex sites to increase confidence and boost housing supply through the provision of infrastructure finance and guarantees.
Significantly scale up investment into partnerships that draw more institutional investment into housing and mixed-use schemes such as the recently agreed Schroders Real Estate Impact Fund , the MADE Partnership with Lloyds Bank Group and Barratt Redrow and HABIKO joint venture with PIC and Muse, and the public-private partnership with Oaktree Capital and Greycoat Real Estate.
- Work with Mayors and local leaders to develop integrated packages of financial support to deliver their housing and regeneration priorities, alongside wider land and grant funding.
Provide the low-interest loans announced at the Spending Review to support the delivery of more social and affordable homes - recognising their importance in tackling the housing crisis.
The £16bn is additional to MHCLG's existing financial guarantee programme, with £6bn of existing finance to be allocated this Parliament. will have greater freedoms and flexibilities to make long-term investments to tackle the housing crisis.
The new National Housing Bank will be a publicly owned subsidiary of Homes England, designated as a Public Financial Institution (PuFin) that is aligned with the requirements set out in the 2025 Financial Transaction Control Framework.
Following this announcement MHCLG and Homes England will work with the Greater London Authority, and established Mayoral Strategic Authorities, to agree how to support them to deliver on regional housing priorities.
As part of this, MHCLG and Homes England may agree that some of this £16bn allocation for the National Housing Bank will be devolved to the GLA or Mayoral Strategic Authorities - and would therefore be delivered outside the remit of the Bank, but with the same targets and objectives
The National Housing Bank is a permanent institution which will deliver debt, equity and guarantees. In many cases CDEL grant will also be a critical part of the capital stack to deliver large scale, complex and transformational housing regeneration and infrastructure projects.
- To support this, alongside these financial products MHCLG will provide c.£5bn CDEL grant to invest across the country. This CDEL grant will sit alongside the financial products delivered by the National Housing Bank to ensure large, transformative and otherwise unviable projects nationwide can be delivered.
