Homes England will commit £300m to small and regional housebuilders to build 10,000 new homes by 2025.
The government-backed body says its Housing Growth Partnership, jointly funded by Lloyds Banking Group, will “provide additional assistance to the most ambitious regional housebuilders in the UK”.
The Housing Growth Partnership was first launched in 2016, but Homes England says the next phase of the scheme “will be broader in scope” to allow investment for larger projects with a development value of up to £75m.
The fund will support a wider range of housing types such as build to rent, regeneration and retirement living.
The body says the fund will also “prioritise projects with a greater sustainability focus, as well as those using modern methods of construction and other evolutionary construction methods”.
The first phase of the fund invested alongside 46 housebuilders to start work on 4,568 new homes, with over 2,200 now completed and sold into the market.
The move is part of the government’s plan to build 300,000 homes a year by the mid-2020s.
Housing Minister Christopher Pincher MP says: “It is a top priority of this government to increase housing supply so hard-working people can be helped into homeownership.
“A thriving Small and medium-sized enterprise sector is crucial to our house building targets and ambitions.
“This significant amount of funding will help smaller and regional housebuilders by providing them with the financial support necessary to deliver much needed new homes.”
Housing Growth Partnership chief executive Vic Hepburn adds: “We are pleased to be building on the success of the Housing Growth Partnership by extending the range of support we can provide to the UK housebuilding market.
“This includes our new multi-tenure approach which will provide more flexibility for housebuilders and more choice for homebuyers.”
Homes England says it already has its first five regional partnerships in place across four different regions of the country with Genesis Homes, Durkan Homes, Stonewood Partnerships, Briar Homes and Cruden Homes.
It adds developers building between 5 and 500 units per year are eligible for support from the fund.
And that up to £10m of investment is available for housebuilders, for projects with a development value of up to £75m.
Lloyds Banking Group will provide £180m of the £300m fund, with the rest coming from Homes England.
Former Cabinet Office minister Michael Gove has recently replaced Robert Jenrick as housing secretary after he was sacked as part of the Cabinet reshuffle.
Gove has several key pieces of legislation in his in-tray that seek to overhaul UK homebuilding and level up the country’s economy.
These include a wide-ranging planning bill, a building safety bill to address Grenfell Tower failings, a leasehold reform bill, which will look to ban ground rent for leasehold flat owners.
The housing department is also looking at proposals to boost renter’s rights, although these plans will be issued as a white paper rather than a bill.