The government has announced a sweeping new initiative to accelerate housing development across the UK with the creation of a National Housing Bank, a major new vehicle intended to grant Homes England greater autonomy and financial clout.
In a written statement, Housing Minister Matthew Pennycook (pictured) outlined plans for the bank, which will be backed by an initial £16 billion in new financial capacity. The bank, still operating under a provisional name, will offer a broad suite of investment products—including direct loans, equity stakes, and guarantees—to spur housing delivery and attract private capital.
Of the £16 billion, £10.5 billion will be dedicated to investment capital. This includes a £2.5 billion pot reserved for low-interest loans aimed at social landlords and housing providers. The remaining £5.5 billion will be made available through contingent liability capacity, allowing the bank to issue housing guarantees and underwrite complex projects.
“The Bank will build on Homes England’s impressive track record of investment,” Pennycook said. “Since 2016, the agency has deployed over £9.6 billion, attracting around £48 billion in private sector investment and helping to unlock more than 600,000 homes.”
The minister said the National Housing Bank will play a central role in Homes England’s evolving strategy, with a detailed investment plan currently in development and subject to approval by the Ministry of Housing, Communities and Local Government (MHCLG) and HM Treasury.
Projections suggest the new bank could support the delivery of more than 500,000 homes of varied tenure over its initial investment period. It is also expected to create hundreds of thousands of construction jobs and generate up to £53 billion in additional private investment.
The government confirmed that the bank will operate in close coordination with local leaders and metro mayors to craft region-specific financial packages that address local housing and regeneration priorities. In London, a City Hall Developer Investment Fund will be established to help the capital meet its annual target of 80,000 new homes and to back regeneration around the London Euston site. Meanwhile, the Greater Manchester Housing Investment Fund is set to be extended.
Despite the scale of the changes, Pennycook assured that the new institution will not disrupt existing Homes England investment programmes or affect customers with Help to Buy loans.
In addition to the bank, the government also announced a further £5 billion in capital grant funding, earmarked for infrastructure and land investment. This funding will be delivered through a newly created National Housing Delivery Fund, which is expected to become fully operational on April 1, 2026.
The establishment of the National Housing Bank marks a significant shift in the government’s approach to housing finance, with officials hoping that increased flexibility and firepower will help unlock stalled developments and meet long-term housing demand.