Barratt and Lloyds Banking Group have formed a partnership with Homes England, creating an opportunity for the largest housebuilder and mortgage provider in the United Kingdom to take advantage of Labour’s plans to build 1.5 million new homes. The joint venture has a valuation of 150 million pounds.
The new enterprise, called the MADE Partnership, will oversee a variety of significant projects. These projects will involve town extensions, new communities designed as garden villages, and brownfield developments. Each of these projects would include a range of dwellings and community facilities, varying in size from 1,000 to 100,000.
According to Home England, the government agency in charge of housing and regeneration, the partnership has all the necessary resources, expertise, and support to create a fantastic place for people to live and work.
The venture will receive an initial capital of up to 150 million pounds, provided by Barratt, Homes England, and Lloyds. These three entities will have equal equity holdings in the firm at the beginning.
However, even though MADE has been described as a “long-term partnership,” the announcement of its debut on Monday did not provide any specific timeframe or housebuilding targets.
This partnership is happening during a crucial period when the UK government is actively pursuing its objective of building 1.5 million new houses within the next five years to address the housing crisis in the country. With a focus on a more comprehensive reform, ministers have pledged to reintroduce mandatory housing targets and swiftly address bureaucratic backlogs to boost the construction of new houses.
Last week, Barratt mentioned that the planning reforms suggested by the Labour government could potentially boost activity in the industry. Housebuilders and mortgage providers in the United Kingdom are eagerly anticipating a significant increase in home construction across the country.
According to Matthew Pennycook, the minister of housing and planning, there has been a significant delay in the construction of numerous new homes in recent years. This delay is attributed to a lack of proper functioning in the development system. This government is committed to collaborating with all those who are dedicated to bringing about positive change.
“The groundbreaking new partnership that was announced today will bolster our dedication to expanding the housing supply and driving economic growth through the creation of additional large-scale, appealing, and environmentally-friendly communities nationwide. These communities will provide the necessary homes, jobs, and infrastructure for communities to flourish,” stated the announcement.
MADE will assume the role of a “master developer,” taking charge of overseeing and managing large-scale projects, including strategy and overall vision. This will include the implementation of primary and community infrastructure, along with ensuring that a strong long-term stewardship plan is in place.
Charlie Nunn, the CEO of the Lloyds Banking group, emphasised the importance of cross-sector collaboration at a significant level of ambition and scale.
In a surprising move, Lloyds recently announced its plans to expand its private rental arm, Citra Living. This expansion will make Lloyds the first bank in the United Kingdom to enter the affordable housing market. This market is exceptional because it offers rental options to households facing financial difficulties at rates that are 80% of the market rates. In order to broaden revenue streams beyond traditional lending, Citra was established in 2021. Given the ongoing shortage of new homes and the soaring house prices in the United Kingdom, there is an ongoing demand for affordable housing and a reliable income for homeowners.