The Government has set out details to tackle the housing shortage by building 25,000 new homes using a £3bn Home Building Fund. The fund, made up of money already set aside for housing, will provide short-term loans to businesses in an effort to encourage new homebuilders into the market.

The plans include spending a further £2bn on an accelerated construction scheme to make publicly owned brownfield land available for development and address the long-term housing shortage. In addition, a plan for urban regeneration aims to develop derelict land and abandoned shopping centres into new communities and convert unused office buildings into homes.

The stimulus fund will help build 25,000 new homes by 2020 and up to 225,000 in the longer term.

Christian Faes, co-founder and CEO of online mortgage lender LendInvest, said of the announcement: “It is absolutely right that this fund should be targeted at small builders. For too long, accessing funding for their projects has been simply too difficult, with the big banks not interested or too constrained to help. According to the NHBC Foundation, 22% of small developers describe obtaining finance as a ‘major challenge’. This fund is a terrific step towards addressing that funding gap and ensuring we improve the number of homes built in the UK.”