The government is readying a post-Brexit vote housing package that will provide billions of pounds to residential developers in an attempt to abate the housing crisis and stimulate the flagging economy.
It is understood that the new multi-billion pound fund, administered through the Homes and Communities Agency (HCA), will back developers from all parts of the industry, including the private rented sector (PRS).
Small and medium-sized enterprises (SMEs) will be in pole position to receive the money, which will be made available in the form of loans, as will developers using modular construction to build out schemes.
A source familiar with the plans said the all-encompassing fund would also support the assembly of complex sites around the country, and would be used to give financial guarantees to developers worried about the risks of delivering big schemes.
The final details of the fund – which the source said would comprise new money – are currently being thrashed out at the top level of government and are likely to be announced in the Autumn Statement.
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Government to take on more risk than ever before
It will mark a shift in attitude from the government to development: it is now willing to take on more financial risk than it has ever done in the past to tackle the ever-deepening housing crisis.
Housebuilders are known to be stepping away from land acquisitions in the wake of the Brexit vote and hesitating on fresh projects – bringing the need for alternatives into sharper focus – and well-placed sources acknowledge that the government understands the need to diversify supply.
Off-site construction has moved to the top of the government’s agenda since the Brexit vote alongside PRS, as ministers seek ways to address the ever-widening gap between housing supply and demand.
Property Week revealed last week that ministers were gearing up to use modular construction to tackle the housing crisis.