Over half a million new homes will be funded under a new government-backed ‘housing bank’ which aims to unlock over £53bn of private investment, Labour says.
The National Housing Bank, a subsidiary of Homes England, will be publicly owned and backed with £16bn of taxpayer cash, as part of Labour’s efforts to build 1.5 million homes over the next five years.
The move will give housing agency Homes England, the ability 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,” the government says.
The 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 small housebuilders “with new lending products and enable developers to unlock large, complex sites through infrastructure finance”.
The bank will also be funded with a further £6bn of existing finance, which will be allocated in this parliament.
The aim of the bank will be to build on existing partnerships the government has with the private sector such as the Made Partnership with Lloyds Bank Group and Barratt Redrow, and the Schroders Real Estate Impact Fund.
The National Housing Bank will also:
- Expand the use of lending alliances with the private sector to boost finance for housebuilders, including smaller firms
- Work with mayors and local leaders to develop integrated financial packages to deliver housing and regeneration projects, alongside wider land and grant funding
- The bank will offer debt, equity and guarantees. In many cases, its grants will be a critical part of the funding to deliver large-scale, complex housing and infrastructure projects
Deputy prime minister and housing secretary Angela Rayner (pictured) says: “We‘re turning the tide on the housing crisis we inherited – whether that’s fixing our broken planning system, investing £39bn to deliver more social and affordable homes, or now creating a National Housing Bank to lever in vital investment.
“The bank will deploy some of the £2.5bn in low-interest loans announced at the Spending Review to support building social and affordable homes.”
Chancellor Rachel Reeves adds: The bank will help unlock a wide range of sites, including larger ones which struggle to get upfront 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 small developer lending by establishing additional lending alliances with private sector partners and leverage in additional capital and expertise, including providing revolving credit facilities to help small developers to grow and build out their housing pipeline more quickly.”
Last September, Lloyds and Barratt Redrow signed an agreement with Homes England to develop large-scale, residential developments from 1,000 to more than 10,000 homes, initially backed by combined equity funding of up to £150m provided equally by the partners.
Lloyds Banking Group chief executive Charlie Nunn says: “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.”
The move comes ahead of Labour’s £725bn 10-year infrastructure strategy, to be published tomorrow, which will set out plans to build homes, roads, railways, hospitals, and schools across the UK.
