British Business Bank agrees ENABLE Guarantee with United Trust Bank to boost lending to smaller housebuilders across the UK

Press release 31 October 2017

United Trust Bank (UTB) has secured an ENABLE Guarantee via the British Business Bank.

The Guarantee will allow UTB to increase significantly the amount of development finance it provides to UK SME housebuilders. The transaction is expected to enable UTB and the British Business Bank to support the building of new housing with a value of over £500m over the lifetime of the guarantee.

This is the first time the government-owned British Business Bank has used the ENABLE Guarantee specifically for the housebuilding sector.

The 2017 Federation of Master Builders (FMB) survey highlighted the challenges that SME housebuilders face in accessing finance. It found that 54% reported a lack of finance constrained their ability to build more houses. The British Business Bank’s Small Business Finance Markets report 2016/17 further highlighted smaller housebuilders’ difficulties, finding that, while non-top ten housebuilders had accounted for 73% of completions in 2009, this had reduced to only 53% in 2015.

UTB’s Executive Director, Noel Meredith and Chief Financial Officer, Jonathan Ayres, have worked closely with the British Business Bank’s Guarantee & Wholesale Solutions Team to structure the ENABLE Guarantee for development finance.

The British Business Bank’s ENABLE Guarantee programme encourages banks to increase their lending to SMEs by reducing the amount of capital required to be held against such lending. Under an ENABLE Guarantee, the UK Government takes on a portion of the counterparty’s risk on a portfolio of loans to smaller businesses in return for a fee. In this instance UTB will allocate this additional capital to increase its funding to new build and redevelopment projects undertaken by SME housebuilders and developers.

We are now able to promote greater access to funding for SME home builders. Property development funding is a complex area where specialist banks can make a large difference, but the capital requirements are onerous, and mitigate against specialists allocating capital to the sector. The culmination of our joint efforts to adapt the BBB’s existing guarantee to make it suitable for property development loans is a meaningful improvement to the capital efficiency of the bank for these loans. This allows us to support more house building projects across the country. UTB is breaking new ground with the ENABLE Guarantee product and will continue its commitment to the SME home building sector with innovative financing and through the cycle funding. This transaction is also a great example of the value of co-operative state and private sector engagement. Graham Davin Chief Executive Officer of United Trust Bank
Banks have frequently reported that the high capital requirements associated with development lending have restricted their ability to lend to SME housebuilders. Our ENABLE Guarantee is specifically designed to address this issue. We are very pleased that our ENABLE Guarantee will help UTB provide the extra finance that smaller housebuilders require to allow them to grow, succeed and build the new housing stock the country needs. We have worked closely with UTB and drawn on the market expertise of the Homes and Communities Agency to make this transaction happen. Keith Morgan CEO of the British Business Bank
Building an economy that works for all means creating the conditions for businesses of all types to start up and scale up. By helping to unlock new investment to create over £500m of new housing, this British Business Bank guarantee will make a big difference in helping smaller housebuilders to grow, invest and hire, delivering more jobs and more homes in all corners of the country. Margot James MP, Small Business Minister
We know that access to finance is a key barrier for SME housebuilders to enter the market and grow their businesses. That’s why we launched the Home Building Fund last year to support smaller builders and to help diversify the housing market, delivering thousands of homes and jobs in the process. It’s great to see the ENABLE Guarantee scheme being extended to SME housebuilders, giving even more SME businesses in this sector the chance to deliver the housing this country needs. Alok Sharma MP, Housing and Planning Minister
Nine years after the financial crisis, the FMB’s 2017 House Builders’ Survey shows more than half of SME house builders are still saying that difficulties accessing finance are proving a major barrier to their ability to build more new homes. These difficulties make it much harder for existing SME house builders to flourish and grow and deter new firms from entering the market. This results in a less dynamic house building sector that is less able to expand to build the homes we need. The picture has improved slightly in recent years through the increased prevalence and appetite among smaller, specialist lenders, but these lenders face their own barriers, not least in the capital requirements placed on them. The British Business Bank’s action to help ameliorate this is a big step forward and we hope that this agreement with United Trust Bank proves a successful model that can be replicated and extended. Brian Berry Chief Executive, Federation of Master Builders (FMB)

Further Information

Notes to editors

United Trust Bank

United Trust Bank (UTB) is a specialist bank providing a wide range of secured funding facilities for individuals and businesses, and deposit accounts for individuals, businesses and charities.

The bank has supported SME developers across a wide variety of projects for several decades, and has dedicated divisions providing asset finance, mortgages, bridging finance, development finance, professional loans and structured finance.

In June 2016, UTB was named ‘Specialist Bank of the Year’ at the ‘2016 Bridging and Commercial Awards’. In April 2016 UTB was placed 25th in the annual Sunday Times BDO Profit Track 100 league table which ranks Britain’s fastest growing private companies.

United Trust Bank was incorporated in 1955. It is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. UTB is covered by the Financial Services Compensation Scheme and the Financial Ombudsman Service. The Bank is a member of UK Finance, a Patron of the National Association of Commercial Finance Brokers (NACFB), an Associate of the Association of Bridging Professionals (AOBP), a Member of the Finance & Leasing Association (FLA) and a Member of the Association of Short Term Lenders (ASTL).

For further information on Union Trust Bank, please visit its website at

About the British Business Bank

The British Business Bank is the UK’s national economic development bank.  Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity. Our remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.

British Business Bank programmes are supporting £3.4bn of finance to over 59,000 smaller businesses, and participating in a further £5.8bn of finance to 86 mid-cap businesses (as at March 2017).

British Business Bank plc is a limited company registered in England and Wales, registration number 08616013, registered office at Foundry House, 3 Millsands, Sheffield, S3 8NH.

As the holding company of the group operating under the trading name of British Business Bank, it is a development bank wholly owned by HM Government which is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). The British Business Bank operates under its own brand name through a number of subsidiaries, one of which is authorised and regulated by the FCA.

More information, including a legal structure chart for British Business Bank plc and its subsidiaries, can be found on the British Business Bank website.