One of the UK’s biggest developers revealed a major initiative today to increase the pace of building on land in urban areas and for major projects.
Barratt Developments said it set up a £150 million joint venture with Lloyds Bank, the major mortgage lender, and Homes England, the government agency. It is one of the biggest moves so far in the industry as it gears up for Downing Street’s plans to build 1.5 million homes in the next five years.
The MADE partnership “will act as master developer for multiple large scale, residential-led developments from 1,000 to more than 10,000 homes along with a variety of community facilities and employment uses,” Barratt pledged.
It will target brownfield developments, on land often in the suburbs or town centres, as well as the next generation of large-scale development of so-called “garden village style communities”.
Both will be crucial to meeting Labour’s manifesto pledge on fast action against the UK’s housing shortage, now one if its highest-profile commitments in government, being run by one of the cabinets’ best-known figures.
Angela Rayner, the deputy prime minister and housing and communities secretary, is responsible for hitting the target. She has already pointed to changes in the planning system to make it easier to get approval for development.
The industry has broadly backed Labour’s plans, but there is also a general feeling that they are ambitious. Elevated rents and high house prices, a key factor of an under-supplied market, are a particular problem in London and the south east.
That means much of the effort will be include the area in and around the M25, where the shortage is at is most acute.
And the MADE Partnership comes as Barratt itself warned only last week that it may complete fewer homes for the financial year ending in 2025 than the 14,000 it did for one to the end of June this year. And that latest annual total was down by a fifth.
The £7 billion company said the pact announced today was for the long-term. They project “brings together the essential skills, expertise and long-term approach, with the ability to unlock and scale the capital required to bring larger sites into production”, according to its launch announcement.
That will enable “both major and SME homebuilders to build the new homes and communities the country needs”, it said.
There will be hopes that joint ventures, streamlined planning procedures and other high-profile efforts to get Britain building – backed with sustained government support – may help alleviate the housing shortage, not least of affordable homes.
David Thomas, chief executive of Barratt, said: “We need to deliver more large developments. Through the MADE Partnership, we are creating a master developer which can manage the infrastructure and placemaking that is needed to deliver at scale”.
Interest rate cuts from the Bank of England will also be an important part of the picture. The base cost of borrowing, which sets the rate of millions of mortgages and other loans, already down to 5% from its recent 16-year peak at 5.25%.
Another quarter-point cut is expected before the end of the year.
