British Business Bank’s ENABLE Build programme is now accepting applications from lenders. The programme, which was included in Chancellor of the Exchequer, Philip Hammond MP’s Autumn Budget 2018, will make available up to £1bn of guarantees to support lending to smaller housebuilders, via specialist and high street banks.
Provided by the Ministry of Housing, Communities and Local Government (MHCLG), ENABLE Build is a new variant of the Bank’s existing ENABLE Guarantee programme. This backing for ENABLE Build will allow the Bank to expand further its support to banks targeting the housebuilding sector. It follows three previous British Business Bank transactions that guarantee portfolios of lending to smaller housebuilders to promote further growth in the UK’s housing stock.
Reinald de Monchy, managing director, Guarantee and Wholesale, British Business Bank said: “The ENABLE Build programme will allow us to build on the ENABLE Guarantee’s success in supporting smaller housebuilders that have traditionally struggled to access the finance they need. Working alongside BEIS, MHCLG and Homes England to tackle both access to finance and the UK housing shortage, this programme is an excellent demonstration of how Government can work across departments to tackle a multifaceted issue.”
The Bank will leverage Homes England’s expertise of the housing market and residential real estate finance, working closely together to consider applications and deliver ENABLE Build successfully. This will help to address challenges faced by smaller housebuilders in accessing finance, delivering growth as part of the modern Industrial Strategy.
Homes England chairman, Sir Edward Lister said: “We are pleased to be using our skills and resources to work alongside the British Business Bank to help create a more resilient and competitive housing market. The ENABLE Build Programme, which opens for applications today will help to address the financial barriers that prevent smaller builders from delivering more homes that the country needs.”
Secretary of State for Communities the Rt Hon James Brokenshire MP said: “This Government is getting on with the job as we work towards our target of delivering 300,000 homes a year by the mid-2020s, so we can make the dream of home ownership a reality for a new generation.
“The ENABLE Build programme is now open for business, providing up to £1bn of guarantees to ensure smaller house builders can continue their vital role in building the homes our country needs.”
The ENABLE Build programme is designed to encourage additional lending to smaller housebuilders by reducing the amount of capital required to be held against such lending by banks. Under both the ENABLE Guarantee and ENABLE Build programmes, the UK Government takes on a portion of the lender’s risk on a portfolio of loans to smaller businesses, in return for a fee.
The scheme will consider applications from lenders where at least 80% of the loans are to developments in England. Housing policy in Scotland, Wales and Northern Ireland is a devolved matter.
The British Business Bank has so far committed guarantees for live portfolios of over £800m under its ENABLE Guarantee programme (as at end October 2018). The Request for the Proposals for the ENABLE Build programme can be downloaded from the British Business Bank website.