Kingswood Homes, a mid-sized developer operating in the north-west and south-west of England, approached Homes England for support in 2020 after struggling to build a pipeline of sites due to funding constraints.
The phased nature of house building projects often means that sites become self-funding after around two thirds of the project have completed, as the builder can use the resulting sales income to repay the debt and meet ongoing construction costs. However, this means it is difficult for smaller builders to invest funds in their next project until the last house on a site has been sold.
Homes England provided development finance funding on four Kingswood residential schemes before developing an innovative new multi-site loan facility in 2020, which allows cash that would normally be used to repay debt, to instead be used to fund future costs, including site acquisitions.
With Homes England support Kingswood has grown from building 36 homes per year in 2016 to over 100 homes per annum and it is anticipated that with continued support, it will remain on track to meet the annual 200 homes target within the next three to four years.
Paul Jones, Managing Director of Kingswood said:
Kingswood has proven that with appropriate financial support, small house builders can grow into medium sized businesses and play a role in helping to address the sustainable quality housing requirements set by government. Homes England has been brilliant in understanding the financial support that we needed in order to deliver that growth and enable Kingswood to potentially access corporate finance in future years.
