Homes England, the UK’s government’s housing and regeneration agency and Invest & Fund, a credit-led alternative finance platform, have announced an expansion of their Lending Alliance, increasing the financial support available to small and medium-sized enterprise (SME) developers in the UK.

This move is part of the government's strategy to deliver 1.5 million new homes over the next five years.

The expanded partnership will now offer development loans of up to £4m ($4.88m), with a maximum of 70% loan-to-gross development value (GDV) and 85% loan-to-cost.

The collaboration, which began in 2020 with a seven-year partnership, initially created a £25m revolving fund to assist small builders with construction loans of up to £2.5m.

The fund targeted schemes of at least two homes, offering up to 80% loan-to-cost. With the refinanced agreement, the fund will increase to £47.5m and extend its term to March 2030 while continuing to focus on micro-SMEs.

This initiative is projected to facilitate the construction of an additional 600 new homes, building on the 107 homes already supported through the original alliance.

It complements Homes England’s direct lending offer, which provides development funding to homebuilders constructing a minimum of five homes per year.

This follows the government's £700m extension of the Home Building Fund for SME developers in December 2024, which aims to support the construction of up to 12,000 additional homes.

Additionally, Homes England formed a £250m master developer joint venture with Oaktree Capital Management and Greycoat Real Estate, to unlock and accelerate large-scale site development throughout England, aiming to significantly boost the housing supply.