Matthew Pennycook has shared further information about the National Housing Bank, which he says will give Homes England greater autonomy and freedom to flexibly deploy loans, equity and guarantees in support of housing development.
In a written statement, the housing minister broke down the initial allocation of £16 billion of new financial capacity. The sum will include £10.5 billion of investment capital, £2.5 billion of which will be set aside for low-interest loans for social and housing providers. The remaining £5.5 billion will comprise of contigent liability capacity that can be used to deploy housing guarantees.
The bank will offer a broad range of products, including direct lending to SMEs, equity investments to support new platforms that can bring new capital into housing, and guarantees to leverage private investment into complex development projects.
The minister added:
“The Bank will build on Homes England’s impressive track record of investment. Since October 2016, the Agency has deployed over £9.6 billion of capital through existing investment programmes, working alongside delivery partners to attract an estimated £48 billion of private sector investment into the vehicles it supports. This investment will deliver or unlock over 600,000 homes.”
The detailed investment strategy for the bank – which will form a key part of Homes England’s overall strategy – will be developed in the coming months and agreed by the Ministry of Housing, Communities and Local Government (MHCLG) and HM Treasury.
Pennycook said:
“Subject to the development of that investment strategy, our current estimates are that over the lifetime of the initial £16 billion investment allocation, the Bank will support the delivery of over 500,000 homes in all parts of the country and of all different tenures; create hundreds of thousands of job opportunities in the construction sector; and leverage in an additional £53 billion of additional private investment.”
The bank will also work closely with mayors and local leaders to develop integrated packages of financial support to deliver on the housing and regeneration priorities of local areas, alongside wider land and grant funding. MHCLG and Homes England will engage Mayoral Strategic Authorities to agree an approach that works best for the needs of each place.
MHCLG will work with the Mayor of London to establish a City Hall Developer Investment Fund to support London’s ambition to build over 80,000 homes per year, and support housing regeneration around London Euston. The Greater Manchester Housing Investment Fund will also be extended.
The creation of the National Housing Bank – a provisional name – won’t change the delivery of Homes England’s existing investment programmes, Pennycook said, or impact arrangements for customers with Help to Buy loans provided by Homes England.
A further £5 billion in new capital grant funding for investment in infrastructure and land has also been allocated. The grant funding will be administered by a new, single National Housing Delivery Fund that will complement investment from the National Housing Bank and be fully operational from 1 April 2026.
