Housing secretary says Enable Build scheme will help deliver housebuilding targets
Updated: Feb 12, 2020
By Joey Gardiner - 30 January 2020 - HOUSING TODAY
The housing ministry has put a £1bn guarantee behind a loan scheme designed to get banks lending to small- and medium-sized housebuilders.The scheme, run via the British Business Bank, was initially announced by former chancellor Philip Hammond in October 2018, but has now been formally opened for business by housing secretary Robert Jenrick.
The scheme, called Enable Build, is designed to give banks the confidence to lend an extra £1bn to small builders with a sovereign government guarantee sitting behind the loans.The government said the scheme would help deliver its manifesto promise to build one million homes in the next five years.Jenrick said small housebuilders “too often struggle to access affordable finance”.“Today, I am giving the green light to a scheme that will help to fix this. Supporting £1bn of new loans so that local builders can kick-start building, level up the country and turbo-charge the housing sector,” he said.
Jenrick told the House of Commons the department was creating a £1bn “contingent liability” to finance the scheme. The government said just 1,737 smal-l and medium-sized builders operate in the UK after numbers were decimated during the credit crunch.There were nearly 10,000 fewer small builders in 2015 compared with the 1980s, with the number having dropped by around 80%, the Home Builders’ Federation said in 2017.
SME builders now account for just one in 10 new homes, compared to a peak of nearly 50% in the early 1980s.The government’s track record in supporting SME builders is mixed. Housing Today reported last week that the number of loans made under the government’s £4.5bn Home Building Fund, administered by Homes England to help SME builders, had slumped by nearly 50% in the last year.
Dave Sheridan, executive chairman at offsite housebuilder Ilke Homes, said the announcement was welcome news.“Backing SME housebuilders is a good step in the right direction, and will complement the backing of modern methods of construction which is already promising to speed up housing delivery,” he said.