“The announced formation of a National Housing Bank marked the latest in a pacey series of positive steps to boost housebuilding in England, says the property agent’s head of department Adam Mirley, in a note to clients. 

The bank, launched this week, under housing agency Homes England, aims to build “at least 580,000 additional homes” the government says, by attracting £53bn of private investment.    

It will be backed by £16bn of taxpayer cash, of which £10.5bn is in loans and equity and £5.5bn in guarantees. On top of this, it will also have access to a further £6bn of existing finance.   

Mirley adds: “It comes on the back of radical changes to ease the planning system with the new National Planning Policy Framework and follows hard on the heels of the Spending Review announcements on funding for affordable housing.” 

In this month’s Spending Review, Chancellor Rachel Reeves roughly doubled the affordable housing budget to £39bn over the next 10 years. 

While earlier Labour changes to the National Planning Policy Framework reintroduced the “mandatory housing targets” for local councils and loosened Green Belt planning restrictions. 

The moves are part of the government’s drive to build 1.5 million homes over five years.

Mirley says: “Together, these three initiatives put in place some key building blocks that should drive a return to growth in the housebuilding sector after the challenges of recent years.” 

He adds: “The National Housing Bank should help to plug the funding gap that currently leaves many good schemes stalled.  

“Development is a risky business and a lack of certainty over returns alongside recent cost inflation and interest rate rises can make finance expensive, if indeed it can be found at all.  

“This is particularly the case for large, complex regeneration and mixed-use schemes that dominate the pipeline in larger cities like London and Manchester.” 

One such project in the capital is the Euston Station regeneration (pictured), which will include an upgraded HS2 terminus, shops, offices and 2,500 social housing across a 60-acre site.  

The cost of building a new station has overrun to £7.5bn from a £4.8bn estimate in early 2023.  

The whole project is forecast to add as much as £41bn to the economy and create 34,000 jobs by 2053, according to a report commissioned by Camden Council. 

Savills director and head of London mixed-use development Sophie Rosier says: “Development in London has been hit by a perfect storm of challenges over recent years and the lack of funding to get started on sites is one of them.  

“Many sites in London are of such a huge scale that very few developers and funders have the capacity and appetite to fund them. The City Hall Development Investment Fund should start to ease this, unlocking some of the many stalled sites across the city.” 

In Manchester, the £4bn Victoria North development is slated as the biggest regeneration project in the North of England.

The joint venture between Manchester City Council and Far East Consortium is set to build 15,000 homes, shops and improved transport links across 390 acres of brownfield land over the next 20 years. Work on this scheme began in 2021. 

Mirley adds: “The government’s enthusiasm for large sites, including urban extensions and new settlements, needed to be backed up with a funding commitment, particularly support for infrastructure provision. 

“Big sites tie up large amounts of capital for long periods of time, and there are only a small number of players bringing forward sites on this scale.  

“More sites will require these organisations to grow and new entrants to come in, and both will be looking for funds.”