Government's £2bn fund will buy unsold homes from housebuilders

To speed up the rate of house building in the UK, a £2bn government fund will offer to buy unsold homes from construction companies if they significantly step-up their rate of production.

As part of chancellor Philip Hammond and communities secretary Sajid Javid's new measures to try and boost the housing sector, the accelerated construction fund will be overseen by the Homes and Communities Agency (HCA).

The fund allow sites to be built out more quickly, HCA chairman Edward Lister told Property Week magazine, as it will guarantee housing developments and so underwrite the risk residential property developers take.

Lister said housebuilders that were, say, planning to build 50 units a year over ten years, would be told "we want you to build all 500 in one go and what we’ll do is guarantee to take them off you if you can’t find a buyer".

Even though demand for housing in many parts of the UK far exceeds supply, residential developers claim to be concerned they cannot build homes faster than they can sell them.