Barratt & Lloyds Combine to Kick-Start UK New Homes Drive

Britain’s biggest housebuilder is teaming up with the country’s largest mortgage lender and the UK’s government’s housing agency to build thousands of homes.

Barratt Developments, Lloyds Banking Group and Homes England have each put £50 million into the joint venture, called MADE Partnership, which will act as the master developer for large sites, reports the UK’s Times newspaper.

Those sites will have space for at least 1,000 homes and in some cases be big enough to fit more than 10,000 homes. They could be an extension of an existing town, the redevelopment of brownfield sites or the creation of “new garden village style communities”, MADE said on Monday.

Housebuilding is a priority for the new Labour government, which has set an ambitious target of building 1.5 million homes over the next five years, something not achieved since the 1970s. It is understood that talks about creating the MADE Partnership began before this summer’s UK general election.

Shane Carberry, a housebuilding industry analyst at Goodbody, said it was a “shrewd move” by Barratt to align itself with the government.

Barratt Developments is one of the largest residential property development companies in the UK, and the second largest housebuilder in the UK.

David Thomas, Barratt’s CEO, said: “We are committed to playing our part in delivering the millions of new homes the country needs over the next 10-20 years. To help us achieve this goal, we need to deliver more large developments.”

UK government's house building agenda

Matthew Pennycook, the UK government’s Housing and Planning Minister, said: “A failure to ensure the development system is working properly has held back the delivery of tens of thousands of new homes over recent years and this government will work in partnership with all those who are focused on turning things around.

“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 with the homes, jobs and infrastructure that communities need to thrive.”

Sir Michael Lyons, a former BBC chairman, chairs the New Towns Taskforce. He and his deputy, the economist Dame Kate Barker, have been told to find a shortlist of appropriate locations where new large communities can be built.

MADE said that bringing together the government, Barratt and Lloyds would provide the “essential skills, expertise and long-term approach” needed for large developments.

Master developers typically find the land, design how it should look and where the infrastructure should go and then take it through the planning process. 

Once planning permission has been granted, they will sell off parcels of land to other developers. MADE expects that both larger and smaller builders will benefit from its work.

It could be several years before any houses are built through MADE. Anthony Codling, Industry Analyst at RBC, said: “We do not expect the partnership to deliver any legal completions until 2028/29 at the earliest, which highlights the complexities and challenges of finding, preparing and taking large sites through the planning process.”

Barratt & Lloyds house-building collaboration

For Lloyds, the MADE Partnership is the latest example of its efforts to increase its commitment to the housing sector. It launched Citra Living, a rental division, in 2021 to diversify its income away from traditional lending and now has about 2,000 homes in its portfolio. This summer it announced plans to convert a number of its old buildings into affordable homes.

Charlie Nunn, Lloyds chief executive, said MADE would help to deliver tens of thousands of homes “which are so urgently required. This is the cross-sector collaboration we need, at significant ambition and scale.”

In post-war Britain, it was a Labour government that set about building ‘new towns’ to ease overcrowding in London and other big cities. The policy stalled in the 1970s amid criticism of the quality of the housing and transport links.

In total, 32 have been built since the end of the Second World War, including Stevenage, Redditch and Welwyn Garden City. The largest and arguably most famous of the new towns is Milton Keynes. Property prices there compare favourably to nearby towns.