Cash Boost for Small House Builders
The government has announced a finance package to support smaller house builders. The Housing Growth Partnership will provide them with an additional £100 million to help support their businesses, take on further workers and boost the housing stock.
The government believes that smaller developers will play a crucial role in getting more properties built at a time when demand is far outstripping supply. Over the past 25 years, the number of developers who build fewer than 100 properties a year has dropped to under 3,000 from more than 12,000. These companies can often offer a more bespoke and exclusive service than the bigger national developers can. They can add in features, such as wrought iron balcony designs, that give a property added style.
The fund has been provided in a 50/50 initiative from the government and Lloyds Banking Group, which have each invested £50 million. It is anticipated that this money will be used for around 50 different investments that will see a further 2,000 properties built. In 2008, the smaller developers were responsible for building 44,000 properties a year. However, with the start of the recession, this number soon dropped to only 18,000. This financial support will just be a start to enable these companies to continue increasing the number of homes they build.
One of the biggest problems facing small builders is the lack of available finance. This scheme is designed to alleviate this issue. It is a good time to provide this input, with the housing market getting back on track following the recession. In the general market, the number of housing starts is at its highest level for seven years, and the number of sites with planning permission has reached its highest point since 2007.
The money will be used to support their work and enable these developers to start on more sites. Increasing the stock of properties from these smaller builders will provide consumers with a greater mix of houses, both in terms of size and style.
By boosting available finance and increasing the number of properties being built, it will enable more people to get on the housing ladder and continue the growth we have seen so far in the market. It should also help to alleviate the affordability issues, as an increase in supply will mean there is less competition for each individual property.