Cabinet Secretary for Communities and Children, Carl Sargeant has announced an additional £30m for the Wales Property Development fund.
It is anticipated that the loan fund, which enables SMEs to access affordable finance, will help more local companies build new homes.
The Cabinet Secretary said that innovation and an increased role for SME housebuilders will help identify alternatives to the existing model for house building.
Carl Sargeant said, “SME house builders were hit particularly hard by the global economic crisis and continue to be affected. I hope the expansion of the Property Development Fund will have a significant impact in helping SMEs who are building homes, and encouraging more local companies to become developers.
“We have a challenging target of delivering 20,000 affordable homes over this term of government. In working to meet our target, I want as many homes as possible to be delivered by SMEs, creating new capacity in this sector. I want to see people thinking innovatively about how we can do things differently to address the challenges we all face.”
The loan fund, which is run by Finance Wales, supports small and medium sized construction companies, who are unable to access affordable finance from traditional sources, to get projects off the ground to build new homes.
Cenydd Rowlands, Property Fund Manager at Finance Wales, said, “The additional £30m is a real boost to the fund and with an expanded team in place we’re excited to support even more small to medium-sized developers. The mixed-use and residential projects we can fund have direct impact on their local communities through direct and indirect employment opportunities as well as providing much needed quality housing.”
Ifan Glyn, Director of FMB Cymru, said, “Nearly 10 years on from the financial crisis, small house builders are still facing serious problems in accessing the finance they need to build new homes. Recent research from the FMB shows that the lending conditions for SME developers were down slightly from 2016, the first fall in this measure since 2013. More than half of small housebuilders over the border in England say accessing finance is a major barrier to their ability to build more homes and we know that this issue is also constraining output for Welsh builders.
“It’s good news that the Welsh government is doing more to assist SMEs in entering, or re-entering, the house building market. This was a key plank of the Welsh government’s Economic Strategy, published earlier this week, and it’s right that enabling smaller firms to build more homes has edged up the priority list. Indeed, FMB Cymru recently signed a pact with Welsh government to address ways in which government and industry can work closer together to deliver the additional homes that we desperately need.”