Home Building Fund
The UK Government has recently announced an update to its Home Building Fund which could be of great use to community led housing projects in England.
The UK's Home Building Fund is administered by Homes England and provides flexible funding opportunities for people or organisations involved in building homes for sale or rent, or preparing land for such homes. It is designed to encourage innovation in the types of homes and the methods for bringing them to market.
The promising aspect of the updated guidance from the UK government is that community-led housing projects are listed specifically as an example of the type of building project which can make use of the Home Building Fund.
Loans are to be available between £250,000 and £250,000,000 with interest at a transparent, and pre-agreed, variable rate. Smaller loan amounts may be considered on a case-by-case basis for innovative housing solutions and serviced plots for custom buildings.
Homes England will consider being the subordinated lender if you wish to seek other third part financing.
The loans are intended to cover development or infrastructure costs as follows:
- Can be drawn down up to 31 March 2023.
- For a term of 5 years.
- Intended to fund the development costs of building homes for sale or rent.
- Can be drawn down up to 31 March 2025.
- For a term of 20 years.
- Intended to fund the costs of preparing sites with the relevant infrastructure to allow development to begin. The projects must ultimately lead to the development of new housing.
Before a loan offer will be made it is expected that the borrowing party will already have a controlling interest in the land and a clear route to achieving planning permission for the projects. This is therefore not a fund designed to assist parties in acquiring land for development. It should be noted that the fund is only available for projects in England. The Wrigleys community -led housing team are excited about the opportunities this fund presents for new community projects across the UK.