New funding aims to spark growth of regional SME housebuilders

A new development finance fund to help regional SME housebuilders thrive has been launched by Newstead Capital in partnership with the government’s housing accelerator, Homes England.

Homes England, Greater Manchester Pension Fund and listed wealth manager Mattioli Woods are among a string of investors who have committed £80m to the new lending facility.

Homes England chief executive Peter Denton said: “This partnership is our latest intervention to offer SME housebuilders a route to finance that may otherwise be unavailable through traditional means.”

He added that his organisation’s investment in the fund signalled the government’s support for accessible and competitive finance for SME developers across the country.

The aim is to grow the fund to £300m in subsequent capital raised and deliver £1bn of lending over the fund’s lifetime by bringing in new sources of institutional capital.

Newstead Capital chief executive Simon Champ said: “Our fund is the first of its kind. We are providing a conduit for long-term institutional investors to gain access to a market which until now has been out of reach.”

Homes England hopes the new fund will diversify lending to SME housebuilders enabling more than 5,000 high-quality, affordably priced and efficient homes to be built as a result.

“By empowering smaller regional housebuilders, the fund will help to encourage the creation of sympathetic and environmentally responsible projects while supporting the regional SME house building sector and boosting regional job creation,” said Mr Denton.