Builders hail £100m fund to give small firms a boost
HOUSING industry leaders have welcomed a £100 million initiative aimed at supporting small construction companies that are struggling to access finance.
The Housing Growth Partnership, backed by £50m from Lloyds Banking Group, has been launched with the hope of creating 2,000 extra homes, as well as helping builders to recruit and train workers.
Karen Campbell, director of policy at trade body Homes for Scotland, said the scheme, supported by the UK government, was a positive step for firms that have been “adversely affected by limited access to development finance”.
She added: “Whilst this Ukwide initiative goes some way to addressing what is a key constraint for smaller developers, this is just part of the challenge.
“In this respect, we are working alongside the Scottish Government on a joint approach to unlocking small developments, with funding issues being considered alongside the challenges posed by land availability, the planning system, infrastructure delivery and opportunities for regeneration.
“It remains vitally important that this particular section of the industry is better supported in order to allow them to deliver more new homes in the right locations to meet Scotland’s diverse housing needs.”
The Scottish Government set a goal in 2007 to raise the rate of new housing supply to 35,000 in a bid to improve affordability – a target that Nicola Sturgeon, now First Minister, described at the time as “ambitious but achievable”.
However, recent official figures show that just 15,541 homes were built in 2014 – some 40 per cent below the levels seen a decade earlier.
Alongside the £50m from Lloyds, the Westminster government has announced it will match that figure to support construction schemes. Overall, the partnership expects to make about 50 investments, ploughing up to £5m in each project, with a goal of providing an additional 2,000 homes.
It will also establish a network of builders, including experienced developers, who will act as mentors and advisers to those looking to expand and grow their businesses.
Andrew Bester, chief executive of commercial banking at Lloyds, said: “We believe building both a greater quantity and mix of homes will help Britain prosper and this partnership will help address the issue of housing supply in the UK.”
Federation of Master Builders boss Brian Berry added: “There has been a sharp decline in the numbers and output of SME housebuilders over the past eight years. One of the biggest obstacles these firms have faced is a severe difficulty in accessing finance. Without adequate access to finance they cannot bring forward the number of new homes they would otherwise.
“The new Housing Growth Partnership will directly help to address this issue and the additional £50m greatly increases the scale of what can be achieved. We commend Lloyds Banking Group and the government on their trailblazing approach and we hope this marks a real turning point in the fight to provide adequate finance to the SME housebuilding sector.” NEW car registrations accelerated in Scotland last month, having shifted into reverse gear in May, as sales across the UK hit a record high.
Latest figures from the Scottish Motor Trade Association (SMTA) show that 21,576 vehicles were sold in June, a surge of more than 12 per cent on a year ago, with Ford’s Fiesta topping the tables on both sides of the Border.
SMTA boss Sandy Burgess said: “The market appears to be shifting towards smaller, more fuel-efficient cars, with the top ten slots being dominated by smaller cars, which in turn account for the majority of the growth seen in these latest results.”
The strong reading for June came after an 8.1 per cent year-on-year decrease for new car sales the previous month, although industry bosses had pointed out that May 2014 had been a record performance for that month.
For the UK as a whole, registrations in the first six months of the year rose 7 per cent to 1,376,889 – the highest half-year performance on record.
June marked a record 40th consecutive month of growth, with registrations up 12.9 per cent on last year, according to the Society of Motor Manufacturers & Traders (SMMT), which attributed the strong growth to low interest rates and attractive finance deals.
Mike Hawes, chief executive of the SMMT, said: “It is still a great time to buy a new car in the UK, and it is encouraging to see more consumers choosing British models.
“This is important for the wider economy with 799,000 people now employed across the UK automotive sector, including retail. We anticipate a flatter second half of the year as the market finds its natural running rate.”
That view was echoed by IHS Global Insight’s chief UK and European economist, Howard Archer, who said: “It seems unrealistic to expect car sales to keep churning out strong growth rates through the rest of the year given that they are now at such an elevated level.”