Government unveils almost £3bn in guarantees for house builders

In addition, build-to-rent developers will see the Private Rented Sector Guarantee Scheme reopen at the end of the year, with £1.94bn available to ramp up housebuilding, according to MHCLG.

A broader variety of projects will be eligible to access additional lending, so more housing projects can be completed “without unnecessary delays”, the government said.

The delivery partner for the scheme is PRS Operations, a special purpose vehicle of Venn Partners.

In its announcement on the detail of the schemes last Friday (27 November), the government said the changes support the ambition to build 1.5 million homes over the next five years. The £3bn boost to the guarantee schemes was first announced in the Budget on 30 October. 

Based on the performance of the schemes so far, the government said it estimates that the increase in guarantees would support over 20,000 more homes. 

Housing minister Matthew Pennycook said: “SME house builders and build-to-rent operators have a crucial role to play in delivering the government’s target of 1.5 million new homes in this parliament.

“The significant additional support provided by our housing guarantee schemes will enable them to access low-cost loans and support the building of thousands of new homes across the country.”

Brian Berry, chief executive of the Federation of Master Builders, the construction industry trade association, welcomed the announcement, saying it provides “greater support” for small house builders.

“SME house builders have a crucial role to play in helping to deliver the government’s ambitious target to build 1.5 million new homes over the next five years,” he said.

“In recent years, small house builders have faced a particularly difficult set of financial challenges. Diversification of the UK’s housing market is essential to deliver the number of homes needed.

“Today’s government announcement providing greater support for small house builders is welcome news. For the government’s plans to succeed, it will be crucial that this lending is available for those small house builders who need it most and can build the homes this country needs.”

Louis Taylor, chief executive of the British Business Bank, welcomed the £1bn expansion of the bank’s ENABLE Build programme.

“Unlocking finance for smaller house builders is more important than ever, not just to help build homes across the UK’s nations and regions and provide people with security, but also to stimulate much-needed growth for the UK economy,” he said.

“Combined with the ENABLE Build programme’s recent expansion to include provision to non-bank lenders, this means that the sector will benefit from both an increased volume and choice of finance.”  

Richard Green, partner at Venn Partners, said that the firm “looks forward to continuing to support the sector with attractive loans from the PRS Guarantee Scheme”.

He said: “Build-to-rent can play a key role in the UK’s private rented sector, delivering high-quality, well-managed homes funded by institutional investors.”