Credco

The National Housing Bank launches fully in 2026 with £16 billion of capitalisation, alongside a new National Housing Delivery Fund, a £700 million extension of the Home Building Fund, and a fresh planning category for medium-sized sites. Taken together, it is the strongest support environment for SME house builders in more than a decade. What it means in practice, for a small builder trying to get out of the ground on a 20-unit site in the second half of 2026, is that the finance stack has more moving parts than ever, and stitching them together properly is the actual job.

What is on the table

National Housing Bank: £16 billion capitalisation, live in 2026, with specific SME lending products designed to plug the gap left by high-street bank withdrawal.
National Housing Delivery Fund: revolving credit facilities and lending alliances aimed at long-term SME support.
Home Building Fund: extended by £700 million, administered by Homes England.
Homes England land release: more sites allocated exclusively to smaller developers.
New medium site planning category for schemes of 10 to 49 homes, with proportionate rules and a possible Building Safety Levy exemption.
Biodiversity Net Gain simplification for SME schemes, in place from May 2026.

Why this matters for the SME builder

The 10 to 49 homes bracket has been the squeezed middle of UK housebuilding for a decade. Too big for the pure self-build route. Too small for the plc pipeline. And increasingly under-served by high-street senior debt. This programme is aimed directly at that gap. Public capital fills the space that senior debt vacated between 2013 and 2020. Planning proportionality reduces both the cost and the cycle time of getting through committee. And the BNG simplification removes a real friction point on smaller schemes, where the requirement had started to eat viability rather than protect biodiversity.

Public money does not remove the need for private capital

This is the point that gets missed. Public facilities work best in combination, not isolation. Most SME schemes will still need senior debt and mezzanine or equity alongside a public facility, and the stack has to be structured around drawdown schedules, valuation gates and exit. Getting the structure right at term-sheet stage saves rework at legal, which saves weeks on programme, which saves cost. A public facility badly stitched into a private stack is worse than no public facility at all.

How Credco is placing these files

Four things make the difference on an SME development file:

Early conversations with lenders on appetite for the specific scheme, site and borrower profile, before a term sheet is committed to paper.
A modelled cost stack across public, senior, mezzanine and equity, with drawdown aligned to build programme.
A realistic view on planning, BNG and infrastructure charges, so nothing lands on the borrower as a surprise at legal.
One point of coordination between introducer, borrower and lenders through to drawdown, so nothing slips between parties in the middle.

If you have an SME development file you would like a second view on, development finance is one of the areas we place most, and we are happy to run through appetite and structure before you commit to a route. Get in touch.

THE CREDCO TAKE

“This is the most supportive backdrop for SME development we have seen in over ten years. The gap that closed most of the small builders in the mid-2010s, senior debt drying up between 5 and 50 units, is what all this is aimed at. Public capital does not sit on its own, though. It sits alongside private senior debt, mezz and equity, and the stack still has to work. For the SME developer sitting on a workable site right now, the real question is not whether the money exists. It is whether the deal is structured well enough to draw it down.”

Hiran, Co-Founder & Director, Credco