(Bloomberg) -- Barclays Plc, one of the world’s biggest investment banks, will invest about 875 million pounds ($1.1 billion) in a U.K. property fund that will lend to home builders.
The fund will make “competitively priced” loans to developers ranging from 5 million pounds to 100 million pounds in a bid to increase the pace and volume of housing provision, the London-based bank said in a statement. The U.K. government’s housing agency will invest 125 million pounds in the venture.
A home supply shortage in London and the Southeast has helped to send s soaring over the past decade, pushing many first-time buyers out of the market. Wages have failed to match the jump in prices and affordability has hit a record low. Sadiq Khan, the mayor of the U.K. capital who was elected partly on a pledge to fix the housing market, is calling for 65,000 new homes a year, compared with 40,000 completed last year.
“There is a vital need to build more good quality homes across the country,” Barclays Chairman John McFarlane said in the statement.
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