Lloyds announces £50m housebuilding fund
Lloyds Banking Group has announced a £50 million equity fund for small housebuilders to help meet the UK's demand for new homes.The bank's chief executive, Antonio Horta-Osorio, said at least an extra 60,000 homes a year would be needed to help tackle the current level of demand."There is no silver bullet to increasing housing supply," he added. "It will take coordinated effort across a range of policy measures, sustained over a decade or more. This is a generational challenge."According to the bank, the new housing fund will provide investment for small and medium-sized housebuilders that are having difficulty funding capital for certain projects, the Financial Times reports.It is to be targeted at firms with a "solid record" in developing residential sites and will invest alongside the SME housebuilder in single-site developments.Mr Horta-Osorio stated that Lloyds funded a third of all lending on UK new-build properties and said housing was critical to the UK's prosperity."But there is more that we can do, particularly in relation to housing supply, given the interplay between supply and affordability," he added.Politicians have criticised banks for failing to lend to small and medium-sized enterprises. In August, chancellor George Osborne announced plans to force banks to refer rejected loan applications to alternative forms of finance.Many housebuilders are turning to other sources to address the funding problem, such as peer-to-peer lending.Some financial institutions are planning to establish their own peer-to-peer platforms as a way to promote lending to small businesses without having to fund directly.Recent weeks have seen another intensification of the political rhetoric surrounding residential construction, with Labour leader Ed Miliband unveiling new measures designed to help the party meet its commitment to building 200,000 new homes a year by 2020.Meanwhile, the government continues to provide investment to boost housebuilding, with a further £3 million pledged earlier this month to unblock stalled projects.
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