UK Markets open in 4 hrs 38 mins

Government's £90m Japanese housebuilding deal targets UK shortage

COVENTRY, ENGLAND - MARCH 14: Estate agent "For Sale" and "To Let" signs adorn a fence next to houses on March 14, 2019 in Coventry, England. (Photo by Christopher Furlong/Getty Images)

The UK government has recruited Japan’s largest house builder, to help it address England’s chronic housing shortage.

Homes England is investing up to £30 million in debt funding and equity in a modular housebuilding venture between builder Sekisui House and Manchester-based regeneration company Urban Splash.

The venture has been tasked to deliver “thousands“ of new homes across England.

Entering the UK housing market for the first time, Sekisui House has taken a 35% stake worth £22m in Urban Splash’s ‘House’ subsidiary.

In addition to the debt funding, Homes England has also taken a 5% stake in the venture, taken from the government’s Home Building Fund - set up specifically to increase house numbers by providing loans to builders.

Noel McKee, entrepreneur and founder of We Buy Any Car, has also taken an incremental stake of around 5% in the venture.

Both the equity and debt funding takes the total investment in the venture to £89.3m.

Kit Malthouse, Minster for Housing said: “Sekisui House bring with them a proven track record in harnessing the modern methods of construction that are transforming home building.

“Backed by Government investment, today’s announcement will support our urgent mission to deliver more, better and faster home construction to ensure a new generation can realise the dream of home ownership.”

Yoshihiro Nakai, President and Representative Director of Sekisui House Ltd said the company’s technology and know-how could help “resolve pressing social issues in the UK.”

“I want to see us play our part effective immediately. These operations can also help bring vitality to UK regions, and we will work to make the strongest connections with the local communities,” he said.

READ MORE: 5 reasons why renting is better than buying a property