The government will directly commission housing projects that use offsite construction through a £3bn fund in an attempt to promote innovation in the industry, the housing minister has revealed.
The Home Building Fund, announced in this year’s budget, will focus on using loans to support small and medium-sized developers, as well as backing modular construction schemes, Gavin Barwell told Property Week at this year’s RESI conference.
There are a “wide range” of ways the government could use the fund to promote the construction method, including direct commissioning or adding conditions to housebuilding projects to say that homes must be built offsite.
“Offsite construction is not just diversifying the industry but promoting innovation within the industry. The reason I’m interested in it fundamentally is that it’s a way of building homes quicker,” he said.
“What the people that run these factories say to me is: ‘We could build more if we had certainty of an order book down the line’. Maybe the government can help with that through these kinds of funds to allow them to increase their capacity and spread their techniques more widely in the industry.”
“Flexible fund” to launch “very shortly”
The fund will launch “very shortly”, he said. It was “flexible”, and would back schemes that “may struggle initially to get funding on the open market”.
“There are problems with the market. We have a number of major developers making an important contribution building homes, but we’ve not got as big a small and medium sized development sector as other countries, less of a tradition of custom build, and less of a tradition of institutional investment in the PRS.
“If I can try and sort those things out that’s going to get us nearer to where we need to be in terms of overall numbers.”
He would not be drawn on speculation that the government would use this year’s autumn statement to bolster the fund, or announce new money for housing, but he said: “Obviously there’s the potential in future autumn statements and budgets to look at resourcing, and I’m always going to bat for that.”
Original link - Property Week
