Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, pursuant to the Answer of 14 November 2017 to Question 111705, what discussions he has had with the Chancellor of the Exchequer on the level of financial support for small and medium-sized enterprise homebuilders.

My right hon. Friend the Secretary of State has frequent discussions with my right hon. Friend the Chancellor on a range of matters, including access to finance for housebuilders. On 16 November I chaired a meeting with the Federation of Master Builders (FMB) and several of their members to explore the issues and opportunities in this area. This was attended by the trade body UK Finance, finance providers, the British Business Bank, the Homes and Communities Agency and representatives from HM Treasury and the Department for Communities and Local Government.

Smaller housebuilders have a vital role to play in increasing both the quantity and diversity of housing supply. The most recent FMB survey shows that access to finance ranks second in the list of their members’ concerns (after land availability and ahead of planning) with 54% of members reporting that a lack of finance constrained their ability to build more homes. The Government is working with private-sector funders to support the sector in a number of ways. For example, the British Business Bank has recently (31 October) agreed an ENABLE guarantee with United Trust Bank. This deal is expected to unlock new investment of at least £500m by increasing the bank’s capacity to lend.

The Homes and Communities Agency updated the meeting on progress with the Home Building Fund, which is on track to exceed its target of 25,000 new housing starts by advancing finance to smaller housebuilders on projects that do not meet the criteria for bank lending. There was also an update on the Housing Growth Partnership, a £100m fund set up in collaboration between the Government and Lloyds Banking Group, which invests directly alongside smaller housebuilders offering investments in the range of £0.5 million to £5 million for each project.

These three examples of a loan guarantee, direct lending and equity investment illustrate themes that were agreed by all those attending the meeting: designing finance products that work for smaller housebuilders; maintaining the diversity of finance providers as well as types of finance; and collaboration between the public and private sectors.