UK: The UK government has announced the creation of a new National Housing Bank, a publicly owned financial institution that will help deliver more than 500,000 new homes across the country.
Backed by £16 billion in new public investment, the bank is expected to unlock a further £53 billion from the private sector to accelerate housebuilding and support economic regeneration.
The initiative is part of the government’s broader Plan for Change, which includes the delivery of 1.5 million homes over the next decade. The bank will sit within Homes England and act as a long-term, flexible partner to developers, SMEs and local authorities.
Deputy prime minister and housing secretary Angela Rayner said the new bank marked a turning point in addressing the housing shortage.
“We’re turning the tide on the housing crisis we inherited. Our foot is firmly on the accelerator when it comes to making sure a generation is no longer locked out of homeownership.”
The National Housing Bank will offer a mix of debt, equity and guarantees to help bring forward large, complex housing schemes that typically struggle to secure early-stage finance.
It will also support small and medium-sized developers through new lending alliances, revolving credit, and bespoke funding packages.
The announcement follows last week’s Spending Review, which delivered a record £39 billion for social and affordable housing and unveiled a £2.5 billion package of low-interest loans.
Chancellor of the Exchequer Rachel Reeves said: “Our Spending Review delivered the biggest cash injection into social and affordable housing in 50 years. The National Housing Bank will help unlock an additional £53 billion in private investment, giving more working people the security of home ownership.”
Pat Ritchie, chair of Homes England, added that the new bank responded to long-standing calls from the housing sector for more flexible and scalable finance. “It builds on our expertise and will allow us to unlock the delivery of new housing and regeneration at pace,” she said.
While the housing and development industry welcomed the move, with several leading voices highlighting the bank’s potential to transform housing delivery, some remain sceptical and worry this might only be a temporary solution.
Stephen Teagle, CEO of partnerships & regeneration at Vistry Group, said: “Establishing the new National Housing Bank as a subsidiary of Homes England will help bring schemes forward at pace, ensure alignment with other programmes and gain traction with developers and investors keen to leverage investment and drive delivery. It recognises that long-term place making and long-term investment go hand in hand. Paired with last week’s measures this is further evidence of a government with an innovative and clear-sighted focus on addressing the years of under supply of new homes to build vibrant communities for the future.”
Phil Mayall, managing director at Muse Places, said: “Today’s announcement is hugely exciting for the regeneration and housing sector. Muse has long advocated the need for a longer-term, partnership approach to the delivery of housing in areas of most need and the new National Housing Bank achieves this at scale. We very much look forward to working in partnership with the Bank and the Government to deliver at pace.”
Charlie Nunn, CEO of Lloyds Banking Group, said: “A new National Housing Bank as part of Homes England is a powerful commitment towards building essential housing across the UK, at pace and at scale. As the MADE partnership between Lloyds Banking Group and Homes England demonstrates, by providing greater certainty and risk-sharing for developers, SME housebuilders, regional and local authorities, while strengthening public-private partnerships for institutional investors, we can accelerate the flow of private finance and deliver more homes in the places they’re needed most.”
Greg Reed, CEO of Places for People said: “The catalytic combination of a generationally significant affordable programme and the creation of a National Housing Bank is truly game changing for the provision of social housing in this country.”
Kate Henderson, chief executive of the National Housing Federation, said: “The National Housing Bank is another welcome, innovative initiative from the government and a clear statement of intent on fixing the housing crisis. Alongside the ambitious new Affordable Homes Programme and the long-term certainty provided by the new rent settlement announced at the Spending Review, the £2.5bn low-cost loans for social housing providers will bolster our sector’s capacity to get building. We will continue to work with the government to deliver the truly affordable homes so many people across the country need.”
Nathan Emerson, CEO of Propertymark, said: “On the face of things, the news of the introduction of the National Housing Bank is much welcome and will inject a desperately needed boost into both the general housing stock and incentivise investment within the private rented sector. We look forward, however, to receiving the finer details of how and who can access this funding For years now, undersupply has caused affordability issues across both the sales and rental market especially within the private rented sector, which has been crippled with rapidly growing demand and a slowing in investment. Therefore, we hope that this injection unlocks enough support for homebuilders and private investors to meet demand well into the future.
“We would urge the UK Government to ensure its finger remains on the pulse, that support is given to all tenures and that it looks to fully bridge the shortfall in order to tackle this issue with longevity in mind. As well as this, a review of Stamp Duty thresholds and taxes imposed on landlords is also needed to address some of the barriers affecting affordability and investment,” he added.
The UK government said National Housing Bank will work closely with mayors and devolved authorities to align funding with regional priorities.
A City Hall Developer Investment Fund will be created to support housing delivery in London, while Greater Manchester’s Housing Investment Loan Fund will be extended to support new homes over the next decade.
A new £5 billion National Housing Delivery Fund is expected to complement the Bank’s investments, supporting infrastructure and remediation on otherwise unviable sites and unlocking large-scale housing projects across the country.
The National Housing Bank should operate as a Public Financial Institution, with long-term objectives and a remit to deliver financial returns alongside social outcomes. Government officials said it will offer consistency and flexibility to developers, while helping build sustainable, vibrant communities.
Highlights:
–The UK government has launched a £16 billion National Housing Bank to accelerate the construction of over 500,000 new homes across the country.
-The initiative aims to unlock £53 billion in private sector investment to tackle the UK housing crisis and support economic regeneration.
-The National Housing Bank, a subsidiary of Homes England, was designed to provide flexible long-term capital through loans, equity and guarantees.
-Small and medium-sized developers were supported with new lending options, including revolving credit and infrastructure finance.
-The programme forms part of the government’s wider Plan for Change, which targeted the delivery of 1.5 million homes and the largest affordable housing investment in a generation.
