Homes England and Invest & Fund, a growing development finance lending platform, have announced a significant expansion of their Lending Alliance, reinforcing their commitment to supporting small and medium-sized enterprise (SME) developers as part of the government’s plans to deliver 1.5 million new homes over the next five years.
The expanded partnership will now offer development loans up to £4 million, at a maximum 70% Loan to Gross Development Value and maximum 85% Loan-to-Cost.
The partnership is projected to facilitate the construction of an additional 600 new homes, building on the 107 homes already supported through the original lending alliance.
In 2020, the Agency announced a seven-year partnership with Invest & Fund, to increase the amount of finance available to SME developers, helping them to grow and deliver more homes at pace. The collaboration created a £25 million revolving fund to enable the support of small builders with construction loans of up to £2.5 million, funding schemes of two homes and upwards, at up to 80% Loan-To-Cost.
The refinanced agreement will:
• Increase the fund from £25 million to £47.5 million.
• Extend the term of the fund to March 2030.
• Continue to focus on supporting micro-SMEs.
This ongoing support complements Home England’s existing direct lending offer, which provides development funding to housebuilders building five or more homes a year and follows the £700 million extension to the current Home Building Fund for SME developers announced by the government last December, which will support the delivery of up to 12,000 additional homes.
Marcus Ralling, Chief Investments Officer at Homes England, said: “Small and medium housebuilders play a vital and essential role in driving the delivery of new homes where they are needed most.
“This refinancing demonstrates our ongoing commitment to supporting the small builders that are crucial to building a diverse and resilient housing sector. By nearly doubling the fund and extending its availability, we’re providing sustained, long-term support to help SME developers grow and deliver more homes at pace.”
Robert Burgess, Chairman at Invest & Fund, said: “Invest & Fund are delighted to be working with Homes England to support SME developers and ensure that they have access to vital funding to deliver much needed new homes across the country.”
