The government is reportedly planning to introduce a UK 'housing bank' through public body, Homes England, to deliver lower-cost finance to the housing industry, unlock larger homebuilding projects and attract more private investment.
According to the Financial Times, Reeves could announce the plans for a “British housing bank” as early as tomorrow's Spending Review.
Sources claim that the plans would enable the government, via Homes England, to more easily deliver cheaper financing to housebuilders by redesignating it as a “public financial institution”.
Under the Treasury’s framework, public financial institutions are able to create financial assets through big investments or large-scale lending, including the British Business Bank, the National Wealth Fund and the Student Loans Company.
The move would allow Homes England to deliver more finance to the housing industry and lower the cost of capital for developers, a personal familiar with the plans revealed.
Under the framework, Homes England would be able to drive low-interest loans for development with local authorities, private developers and housing associations able to bid for funding.
The government has already pledged to accelerate housebuilding and deliver 1.5 million homes over this parliament.
However, the change to Home England's powers is not predicted to produce an immediate increase in funding, but rather gain momentum and deliver change in the next parliament.
Chancellor Rachel Reeves is also reportedly considering an increase in funding to the government's Affordable Homes Programme, providing a total of £25bn over the next ten years.
The Programme allocates grant funding to local authorities and housing associations to help support the costs of developing affordable housing for rent or sale.
