Accelerating Housing Delivery Through Risk Capital Approaches
20.05.2026 - 02:53
Mandala’s latest research, prepared with CBRE, aims to understand the benefits of shifting public-sector subsidies from grant dependence to risk capital co-investment. Risk capital is the deployment of sub-market loans to housing developments and has been applied in Greater Manchester to halve the effective public cost of subsidisation. As England grapples with a viability crisis, risk capital can provide an effective policy solution. This report models the deployment of £8.5bn from the National Housing Bank as risk capital across England. The report finds that deploying this capital within existing fiscal rules could unlock 94,000–104,000 additional homes by 2031, depending on the deployment strategy. This could crowd in £22bn in private investment, generate £5.6–£5.8bn in cumulative GDP growth, and support 71,000–73,000 jobs across England while recovering public capital with interest.
England’s housing crisis is rooted in a breakdown of development viability. Costs have risen sharply while prices have stagnated. Housebuilding has become commercially unviable across the country. Construction material costs have risen 39% since 2021, driven by cement, concrete and plastic products. Financing costs remain elevated following the 2023 interest rate peak of 5.25%. House prices, meanwhile, have grown just 8% since 2022 and have been flat since 2023. As a result, new dwelling starts have fallen 36% from their 2022 peak.
The government has worked to boost housebuilding through planning reform; however, this alone cannot close the delivery gap. The December 2024 NPPF restored mandatory housing targets, defined 'grey belt' land for release, and required Green Belt reviews where housing needs cannot be met. The OBR assessed these reforms as the largest positive GDP impact ever assigned to a zero-cost policy, forecasting an additional 170,000 homes by 2029-30. However, total delivery is still projected at only 1.26 million homes by 2030, leaving a 240,000-home shortfall against the government's 1.5 million target. Further support is needed to accelerate development.
Risk capital can provide this further support. Unlike traditional grants, where the Exchequer bears both the cost of principal and interest, under a risk capital model, the principal is repaid with interest (subject to policy aims) and can be recycled into future projects without additional borrowing. In Greater Manchester, under the Good Growth Fund, risk capital has halved the effective public cost per home. The Fund has since committed £350m in its first wave, enabling 3,000 homes and 2 million sq ft of employment space.
This report models the deployment of £8.5bn from the National Housing Bank as risk capital across England. The £8.5bn can be deployed in two ways: directed to city-region Mayors, unlocking 94,000–104,000 homes by 2031; or allocated agnostically, wherever viability gaps are smallest, unlocking up to 123,000–198,000 homes.
This intervention will drive investment and generate significant economic returns. Deploying £8.5bn in risk capital to city-region Mayors at a 4.4% return, crowds in £21.6bn in private investment, supports 71,000 jobs across England by 2031, and generates £5.6bn in cumulative GDP uplift. Accepting a 0% return reduces the average public cost per unit and further lifts delivery, private investment, and employment.
Read the full report here.
Read our latest posts
The Stagnant Nation: Lifting Australia’s Dynamism
Australians are going backwards on real wages and income. Real wage growth has fallen from 0.6 per cent in the 2000s to -0.7 per cent today, the slowest rate since the 1990s recession. Weak productivity growth is a key driver. Productivity growth has dropped from 2.2 per cent in the 1990s to just 0.1 per cent today. The Productivity Commission has pointed to declining economic dynamism as one cause for weak growth, with fewer businesses starting, growing and competing. We confirm declining economic dynamism across five key dimensions and estimate that reversing this decline seen since the mid-2000s could see a GDP uplift of $101 billion per year over the next decade. Our analysis finds that regulation could account for around 20 per cent of declining dynamism. Reducing regulatory burden to late-2000s levels could see GDP uplift of at least $20 billion per year over the next ten years.
7 Oct, 2026
Demonstrating the economic benefits of Airwallex in Australia
Mandala's latest research, commissioned by Airwallex, quantifies the direct and indirect economic benefits of Airwallex in Australia. Airwallex supported $4.6 billion in economic benefits in 2025, a figure roughly equivalent to 2 per cent of the Australian tech sector's contribution to GDP. Of this, $2.5 billion flows directly to platform businesses through productivity gains, new market access and cost savings, with the remainder reaching the broader economy as those benefits move through customers' supply chains. Airwallex supports 29,000 jobs across the Australian economy, and a quarter of economic benefits flow to regional, rural and remote areas. Small and medium businesses capture the largest share of any business segment on the platform, $2.1 billion annually, or $200,000 in economic benefits for the average SMB each year.
16 Sep, 2026
Power to the people
Mandala’s latest research examines how Greater Manchester turned devolved power into economic growth, why it worked, and what it could mean if similar powers were extended across England. Since devolution began in 2009, Greater Manchester’s economy has grown by nearly 45%, outperforming both the rest of England and the UK as a whole. Greater control over funding and policy has enabled the Mayor and Greater Manchester Combined Authority (GMCA) to coordinate investment in transport, housing, skills and economic development around local priorities. This has supported a 41% increase in bus journeys, recycled £300m of government capital into around £1bn of housing investment, delivering 11,000 dwellings, and increased employment in key sectors by over a quarter, compared with 14% across England. Integrating health and social care has also improved life expectancy, with the largest gains in self-reported health in the least healthy neighbourhoods. If local and combined authorities in England had these powers and replicated Manchester, we estimate an annual boost to the economy of up to £80bn, over 93,000 new homes, and £3.1bn in additional economic activity from improved life expectancy.
7 Sep, 2026
The Hidden Economy: Addressing Australia’s Domestic Work and Care Divide
Mandala’s research, in partnership with DoorDash Australia, examines the scale and distribution of Australia's unpaid household labour, the real costs it imposes on individuals and the economy, and the role that emerging technologies and policy reform could play in reducing and more equitably sharing that burden.
6 Sep, 2026