Homes England, Capitalisation of the National Housing Bank Subsidy

This Homes England, Capitalisation of the National Housing Bank subsidy will provide a grant of £16 billion to capitalise the National Housing Bank (“NHB”). It is aimed supporting the delivery of the government’s housing and regeneration priorities in England. Homes England (“HE”) created the NHB in November 2025. The NHB will be operational from 1 April 2026 and will run in accordance with the commercial market operator principle so it’s transaction subsequent to capitalisation will be on market terms.

This subsidy is an SPI as it exceeds £25 million in value.

Our key takeaways from the Subsidy Advice Unit (SAU) report are:

• When addressing issues that the subsidy seeks to remedy, such as ‘market failures’, evidence all assertions in detail. For example, HE explained that market participants have ‘asymmetric’ levels of information – this could have been further evidenced by reference to the findings of HE’s own market engage exercise.
• Directly address the potential for competitive distortions in the equity and debt markets, for example by estimating the value of National Housing Bank’s capitalisation and expected debt and equity financing as proportions of the overall markets for debt and equity for housing developers.
• When setting out the pros and cons of the subsidy against the policy objective, also consider risks from market-wide movements (like house values) that might impact the NHB’s returns (and therefore the likely benefits from the capitalisation).

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