Backed with £16 billion in financial capacity, on top of the £6 billion already committed during this Parliament, the National Housing Bank will sit within Homes England and is expected to catalyse up to £53bn in additional private sector investment. In total, this could deliver over 500,000 new homes.

The Bank will mark a step-change in how the government supports housing delivery. It will provide long-term, flexible capital, offering developers greater certainty and stability through equity, loans and guarantees. This approach will be particularly valuable in locations where unlocking large, complex or high-risk development sites can be challenging under current financial models.

The initiative is part of the UK Government’s wider Plan for Change, which includes a £39bn investment to expand the delivery of social and affordable housing and a commitment to building 1.5 million new homes. A 10-Year Infrastructure Strategy will follow, outlining £725bn in infrastructure investment to support economic, housing and community regeneration across the UK.

The National Housing Bank will also play a critical role in addressing one of the key challenges facing SME developers—access to finance. By establishing lending alliances with private sector partners and offering revolving credit facilities, the Bank will enable SMEs to grow, invest in skills, and deliver more homes at pace.

Importantly, the Bank will work in partnership with devolved administrations, mayors, and regional authorities to align investment with local housing needs and regeneration priorities.

Deputy Prime Minister and housing secretary Angela Rayner said: “We are determined to tackle the housing crisis we inherited. Whether through reforming the planning system or unlocking finance, this government is taking bold steps to ensure more families can access safe, secure, and affordable homes.”

Chancellor of the Exchequer Rachel Reeves added: “The creation of the National Housing Bank will drive long-term investment in the housing sector, giving developers the tools they need to deliver homes and generate economic renewal across the UK, where there is an urgent need for affordable, sustainable housing.”

Industry welcomes the move

Key figures across the housing sector have welcomed the creation of the National Housing Bank.

Brian Berry, chief executive, Federation of Master Builders: “Finance is one of the biggest barriers to SME housebuilders. This Bank is a clear step forward and offers confidence to smaller developers.”

Phil Mayall, managing director, Muse Places: “A long-term partnership model like this will help us to deliver at scale in areas of greatest need.”

Kate Henderson, chief executive, National Housing Federation: “This is a bold and innovative step. Paired with the expanded Affordable Homes Programme, it offers a real opportunity to address the UK’s housing shortage.”

Charlie Nunn, CEO, Lloyds Banking Group: “This public-private model will help to de-risk investment, supporting institutional partners and developers alike.”