By Catriona Lingwood, Chief Executive of Constructing Excellence in the North East
A new fund has been launched to kick-start developments across the North East where affordable housing is still in short supply. The £10 million North-East Property Fund has been launched to provide a vital boost for the industry in our region.
It has been created in response to the huge demand from SME construction and property development companies who are unable to access mainstream finance from traditional sources. It’s hoped that the fund will help enhance development in smaller scale property ventures across the region. It will give smaller construction firms the confidence to pursue projects to build vital new housing, meaning we’ll have more firms building, which is exactly what we need!
Loans ranging from £250,000 to £1 million for non-speculative residential and commercial developments in Tyne and Wear, Northumberland and County Durham are available, with repayment terms between nine and 18 months. The fund aims to finance the build of over 300 new homes and finance the development of around 4,000 square metres of commercial space. This is forecast to contribute to in excess of £25m to the regional economy, creating or safeguarding over 600 local jobs – a win-win situation all round!
The idea for the fund came from FW Capital who will now manage the North-East Property Fund. It is backed by Santander and the North East Local Enterprise Partnership and held by NPF 2016 Ltd.
The Housing White Paper published earlier this year scrutinised the housing market, stating that it was simply broken. As 60 per cent of new homes are built by just 10 companies, which really isn’t a lot, the government agreed to back more small independent builders through the £3 billion Home Building Fund. Since the 1970s, an average of 160,000 homes a year have been built in England, that’s 115,000 less than what is needed now to keep up with the country’s growing population and catch up with years of under supply.
In the North East, an estimated 6,440 homes were built last year against an annual target of 9,000 and only 1,420 of the 3,800 target for affordable homes were built. It’s promising to see such a bold initiative that is confronting the urgent need to deliver more new-build properties head on. There’s no false promises and unachievable goals, it’s an initiative that could really work, and I’m excited to see how it all unfolds.
For more information on Constructing Excellence in the North East, please contact chief executive, Catriona Lingwood, on 0191 500 7880 or email firstname.lastname@example.org.