The new fund from the partnership was established by Lloyds Banking Group and Homes England, with £180m and £120m of equity provided, respectively.
It follows the success of its first fund which was set up in 2016.
The new fund aims to support a wider range of housing tenures and work towards its target of delivering 10,000 new homes by 2025.
It will enable investment into larger housebuilding projects with a development value of up to £75m and inject capital into BTR, regeneration and retirement living schemes.
The partnership will also look to prioritise projects with a greater sustainability focus, as well as those using MMC and other evolutionary construction methods.
“It is a top priority of this government to increase housing supply so hard-working people can be helped into homeownership,” said housing minister, Christopher Pincher.
“A thriving SME sector is crucial to our housebuilding targets and ambitions.
“This significant amount of funding will help smaller and regional housebuilders by providing them with the financial support necessary to deliver much needed new homes.”
The new fund will also partner with the most ambitious SME housebuilders in the UK to support their growth and development through its new Regional Growth Initiative.
Through this scheme, HGP will pledge a higher level of dedicated equity support to these housebuilders over a defined period to allow them to invest in their businesses and target larger and more strategic sites.
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The first five regional partnerships are already in place across four different regions of the UK with Genesis Homes, Durkan Homes, Stonewood Partnerships, Briar Homes, and Cruden Homes.
Moving forward, it is being rolled out UK-wide, with the aim of trying to support the next generation of large regional housebuilders.
“We are pleased to be building on the success of the HGP by extending the range of support we can provide to the UK housebuilding market,” commented HGP CEO, Vic Hepburn.
“This includes our new multi-tenure approach, which will provide more flexibility for housebuilders and more choice for homebuyers.
“The introduction of the Regional Growth Initiative will also allow the HGP to support the most ambitious housebuilders in a more substantial way, with additional financial and strategic support.”
Harry Swales, chief investment officer at Homes England, added: “The HGP has already proved to be a huge public-private sector success, and we’re now pleased to expand the fund to offer SMEs further support.
“By injecting this additional investment and harnessing Lloyds Banking Group’s commercial skills, we’re able to diversify the market, support increasing numbers of builders, and provide the homes the country needs.”
Since its launch, the HGP has invested alongside 46 housebuilders to support the creation of 4,568 new homes, with nearly half now completed and sold to families across the UK.
Developers building between five and 500 units per year are eligible for support.
Up to £10m per investment is available for individual housebuilders.