The UK Government has announced the National Housing Bank (NHB), which aims to provides flexible, affordable development finance and dedicated support to help smaller housebuilders unlock sites, accelerate delivery and grow sustainably.

The NHB is backed the government and is focused on helping smaller housebuilders thrive by enabling smaller builders to expand their pipelines, diversify supply and deliver the homes that are needed. 

Eligibility for funding from the scheme requires certain things be meet, such as a minimum scheme of five homes, a loan from £250,000 to £200m with equity of 20% and the site must be owned by a UK-registered entity.

The loan product is typically 3 years, although longer terms are available, with a maximum loan to cost (LTC) of 90%, but typically around 80%, the equity contribution can include planning gain and the interest margin is 3% to 7%, capitalised quarterly. The accelerator loan will see the land acquisition tranche typically be priced at 1.5 times to 2.5 times the development finance margin with an arrangement fee of 1% (no non-utilisation or exit fees).

More information is available here: https://www.gov.uk/guidance/national-housing-bank-support-for-smaller-housebuilders