National Housing Bank ‘will boost delivery of new homes'
The National Housing Bank, a subsidiary of Homes England, will be publicly owned and act as a consistent partner to the private sector, bringing stability and certainty to housing developers and investors, the Government said.
It will be designated as a public financial institution and will work with mayors and local leaders to back housing projects meeting regional priorities.
It is hoped the bank will help to unlock a wide range of sites, including bigger ones which struggle to get upfront lending given their risk and complexity.
The Government also said the move will help SMEs (small and medium-sized enterprises) to grow and build out their housing pipeline more quickly.
Deputy Prime Minister and Housing Secretary Angela Rayner said the Government's foot is 'firmly on the accelerator' (Gareth Fuller/PA)
The bank will deploy some of the £2.5 billion in low-interest loans announced at the spending review to support the building of social and affordable homes.
It will be backed with £16 billion of financial capacity, on top of £6 billion of existing finance to be allocated this Parliament, the Government said.
It said the new public investment could help build more than 500,000 new homes.
Deputy Prime Minister and Housing Secretary Angela Rayner said: 'Our foot is firmly on the accelerator when it comes to making sure a generation is no longer locked out of homeownership – or ensuring children don't have to grow up in unsuitable temporary accommodation, and instead have the safe and secure home they deserve.'
The announcement builds on plans for a 10-year affordable homes programme and comes ahead of a 10-year infrastructure strategy to be published on Wednesday, setting out plans to 'rebuild the UK' over the decade ahead.
Chancellor Rachel Reeves said: 'The new National Housing Bank will unlock £53 billion of additional private investment.'
Homes England chairwoman Pat Ritchie said: 'Establishing the National Housing Bank, as a part of Homes England, builds on the agency's expertise at providing a wide range of finance to partners and places to unlock the delivery of new housing and mixed-use schemes.'
A spokesperson for the Royal Institution of Chartered Surveyors said: 'The launch of a National Housing Bank is an exciting innovation which could propel much-needed investment into housebuilding.
'The industry, and especially SMEs, need all the support they can get for the country to build.
'Confidence is key if the Government is to meet its 1.5 million home target and new streams of investment and support should invigorate new and existing projects.'
The Conservatives warned the remit of the new bank must be 'laser-focused'.
Kevin Hollinrake, the shadow housing secretary, said: 'While the ambition to increase housing supply is welcome, history teaches us that governments are often poor at picking winners and Homes England has very mixed results.
'The new National Housing Bank must be laser-focused: it must not crowd out private capital, must not subsidise developments that would have proceeded anyway and must not be lured into funding pie-in-the-sky or unviable projects – instead its role should be limited to de-risking only those schemes that are genuinely unable to attract finance, to ensure taxpayer money is not wasted and private investment is not crowded out.
'But beyond this we must look at the root cause of the housing problem – including why SME developers have been driven out of the market and why financing has become so unattractive that the Government needs to step in. Only Kemi Badenoch and the Conservatives are doing the deep thinking necessary to address these root issues.'
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