The government is set to extend its plans to guarantee returns to investors on key construction projects to the social housing sector, following the intervention of business secretary Vince Cable this week, reports Building.
In the midst of worsening economic and housing data, Cable used a speech to the Centre Forum think-tank to trail the use of government guarantees to “trigger a significant volume of housing investment”. Cable also convened a meeting of 20 senior public and private housing leaders, including Redrow chief executive Steve Morgan, to discuss how to get the industry moving.
A government source told Building that Cable’s intervention is a sign of the growing importance the government is attaching to housebuilding as a means of boosting its economic growth strategy. The source said plans to use government guarantees were at an early stage, but that Cable was keen to use them to increase construction of mixed tenure housing schemes.
The news came as housing minister Grant Shapps relaunched the government’s Get Britain Building fund, which still has a pot of over £100m available to fund development on small sites, reports Construction Enquirer.
The £570m loan fund was put in place at the end of last year to unlock stalled sites with planning permission in the hope of spurring more than 15,000 homes to be built. The scheme offers loans available to projects on commercial rates or by taking equity stakes in order to share risk.
Shapps revealed that more than £100m is still in the fund, which could see an extra 2,000 homes built.
In the original bidding round, builders could only seek funding for sites where there were plans to build 25-homes and above, but this has now been lowered to sites of 15 houses in the hope of attracting more bids.
A decrease in housing starts was a significant contributor to an 8.5% fall in construction output in April compared to the previous year, according to the Office for National Statistics.
Construction output over the three month period between February and April also fell 6.7% on the previous year, it said. The largest decreases were in new public projects, excluding housing and infrastructure, (down 22.4%) and new public housing (down 22.1%).
