Homes England have recently revealed the funding criteria of two new funding pots for housebuilders with a view to supporting the government’s new ‘levelling up’ scheme that was unveiled on February 2nd. Included in these pots
is a £1.5bn Levelling Up Home Building Fund – a fund designed to provide the required finance for builders struggling to secure commercial loans.
After the government gave Homes England a new remit to support efforts to encourage local regeneration and announced that the previously introduced 80/20 rule has been cancelled, details for the new funds were laid out. The new funds are part of a host of announcements made by the government in support of the ambitions stated in the newly released Levelling Up White Paper.
What are the new funding pots?
There are two new funding pots that have been announced by Homes England. The first of which – the Levelling Up Home Building Fund – has been created to provide commercial loans anywhere between £250,000 and £250m to finance the development of new build properties for sale or rent. Eligibility for the scheme depends on the financial viability of the development, if the development would stall without the help of the fund and if the project provides at least five homes.
The other funding pot recently announced by Homes England is the Home Building Fund. It is a separate fund intended to provide loans to developers, master developers and landowners anywhere up to £250m that can be used to pay for enabling, site preparation or other infrastructure works. According to the agency, the Home Building Fund can be used for any “on-housebuilding activity needed to unlock large sites and enable partners to use their capital resources to deliver housing quickly”.
In order to be eligible, Homes England have stated that successful bidders would need to have a controlling interest in the area of land being developed as well as a clear route to achieving planning permission and a masterplan or outline planning granted.
The new funding pots have been introduced following the release of the Levelling Up White Paper; a document released by the government that outsets their plan for the housing market in the country. The Government are keen to make good on their promise to turn ‘generation rent’ into ‘generation buy’ – and these funds can help prepare the new build market for the proposed demand for new homes as the government introduces various schemes to encourage first- time buyers to enter onto the property ladder.
