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Lloyds Banking Group and Barratt have formed a new venture with the government housing agency Homes England to plan large-scale projects to build thousands of homes.
The organisations will each provide £50mn of initial funding to launch Made Partnership, which will oversee big housing projects such as “large brownfield developments” and “new garden village style communities”.
Housing minister Matthew Pennycook said on Monday: “The landmark new partnership announced today will support our commitment to ramp up housing supply and boost economic growth by developing more large-scale, attractive and sustainable places across the country.”
The new Labour government has made housebuilding a priority, pledging to increase supply to 1.5mn new homes over five years — a level of output not achieved in almost half a century.
As part of these plans, the government has already launched a task force aimed at speeding up the delivery of homes from existing large-scale developments that it says have “stalled”.
It has also appointed former BBC chair Sir Michael Lyons and economist Dame Kate Barker to lead a commission to find a shortlist of appropriate sites for several “new towns” of at least 10,000 homes each.
Made Partnership signalled it was open to projects on this scale, saying it would lead development of “multiple large-scale, residential-led developments from 1,000 to more than 10,000 homes”.
David Thomas, chief executive of Barratt, one of the UK’s largest housebuilders, said that to deliver millions of new homes over the next two decades “we need to deliver more large developments . . . We are creating a master developer which can manage the infrastructure and placemaking that is needed to deliver at scale.”
The new venture will be led by Stephen Kinsella, Barratt’s group major projects director.
Master developers typically locate and assemble land for large developments, and take charge of planning and infrastructure — ranging from building schools and roads to local employment strategies and setting up community groups. They provide parcels of land to multiple housebuilders within the development.
Anthony Codling, analyst at RBC, said the venture likely would not complete any homes until 2028-29, “which highlights the complexities and challenges of finding, preparing and taking large sites through the planning process”.
Master developer Urban & Civic, owned by the Wellcome Trust, has built up a portfolio of more than a dozen sites totalling 33,000 consented homes.
The move increases Lloyds’ commitment to the housing sector. The high street lender first announced plans to become a private landlord in 2021, under the brand name Citra Living. The bank, which also owns Halifax and Scottish Widows, is pursuing a £4bn strategic overhaul that aims to diversify its income stream away from traditional retail banking.
Chief executive Charlie Nunn, who hosted a social housing forum with housing executives and policymakers in July, has also announced plans earlier this year to turn some of its data centres and office sites into social housing, with a first development in Pudsey, West Yorkshire. Citra Living has a portfolio of about 2,000 homes across the UK.