The Home Building Fund for SMEs has been extended beyond March next year, with up to £700 million available to support the delivery of around 12,000 additional homes.
The Ministry of Housing, Communities and Local Government (MHCLG) said it had committed to providing ongoing funding for SME housebuilders, allowing them to “play a crucial role in the government’s Plan for Change to build 1.5 million new homes over five years”. The fund had been due to close to new business on March 31 2025.
The Home Building Fund, managed by Homes England, provides a range of financial support for smaller housebuilders in England struggling to access finance from traditional lenders, including direct loans and lending partnerships.
MHCLG has increased the amount of cash available; it said the extra homes this would support was in addition to the 42,000 homes the fund was set to deliver.
MHCLG noted that access to credit continued to be a “key constraint” for SMEs, with its “intervention” helping to remove barriers to homes delivery.
The Budget also included support for SMEs, through £3 billion in housing guarantees which adds to existing schemes.
On November 27, MHCLG opened the scheme which will allow small housebuilders to apply for more accessible loans from banks and lenders. Government guarantees, according to MHCLG, reduce lenders’ risk, encouraging them to increase the supply of credit for housebuilders.
On the Home Building Fund extension, Angela Rayner, deputy prime minister and housing secretary, said: “Smaller housebuilders have a critical role to play in our Plan for Change to help us build 1.5 million homes over five years and the government is fully committed to backing them to grow.
“Government loans are providing vital support to many housebuilders in the SME sector, but previous failures to provide ongoing funding meant the scheme had been set to shut its doors in March.
“They must be the bedrock of our plans. That is why I’m extending the fund so more of them can access the capital and investment needed to deliver thousands of new homes across the country and help us fix the housing crisis for good.”
