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In October the government announced that it has set aside a £3bn fund to help small house builders finance developments in a move to speed up delivery and promote new approaches to housebuilding.
Since this time the HCA has received unprecedented levels of interest from thousands of house builders and housing associations from across the country with over £200million worth of funding already allocated.
Although funding will be available until March 2021, with such high demand we're encouraging clients to consider whether they want to apply now. Our summary below will provide you with more information on eligibility and process to help you decide.
Who is eligible?
The fund is open to small house builders, community builders, custom builders and regeneration specialists. The HCA has confirmed that housing associations can bid for the fund with the eligibility criteria being the same for both private house builders and housing associations.
Funding is available for community led housing projects, serviced plots for custom and self-builders, off-site manufacturing, new entrants to the market and groups of small builders working in consortia to deliver larger sites.
The fund has the following core eligibility criteria:
Which schemes are prioritised?
The HCA is prioritising schemes which will provide the maximum amount of housing for the funding provided. Small and medium organisations are also being prioritised and the focus of the HCA is very much on those who can provide workable schemes which are deliverable.
Who administers the fund?
The fund is being administered by the Homes and Communities Agency (HCA), also known as Homes England, which has set up various Home Building Fund teams across the country.
Applicants can apply to the HCA online or by email, phone or post. To lodge an initial enquiry the following questions will need to be answered:
Once an initial enquiry has been made, applicants will be allocated a transaction manager. Homes England will review development plans and business finances when considering an application.
Homes England has stressed that it is taking a responsible approach to funding to ensure that borrowers will not be overstretched and that funded schemes are financially viable.
The interest charged will have two elements, a base rate and a margin. The Base Rate is the prevailing European Communities Base Rate for the UK (variable) and the margin offered will depend on the creditworthiness of the applicant, nature of the investment and collateral offered.
Typical repayment periods are up to 5 years for development finance and up to 20 years for infrastructure loans.
Security can be provided by any of the following:
In a recent spending review Rishi Sunak revealed a £7.1 billion national home building fund to help tackle the housing crisis. However, further clarity is needed in the wake of this spending review as to whether the recent stamp duty holiday will be extended.
For help and information on the Home Building Fund, how it might affect the housing market and how it might affect you, contact Joanna Upton at Foot Anstey via email [email protected] or on 02380 172207. You can also find information from the Home Building Fund Enquiries Team at the HCA on 0300 1234 500
