Small builders are to receive a £100m cash boost in recognition of their role in keeping the country building, Housing Minister Brandon Lewis has announced today (6 July).

As part of the Housing Growth Partnership, the money will act as a dedicated initiative that will invest in new developments alongside smaller builders, providing money to support their businesses, helping get workers on to sites and increasing the housing supply.

The Partnership will also establish a network of builders, including experienced developers, who can act as mentors and advisers to those looking to expand and grow their businesses.

The government has matched a £50m investment from Lloyds Banking Group to create the partnership, which expects to make around 50 investments and provide an additional 2,000 homes.

Over the last 25 years, the number of firms building between one and 100 units a year has fallen from over 12,000 to less than 3,000.

Housing Minister Brandon Lewis said: "The 2008 economic crash devastated our army of small builders, with delivery falling from 44,000 homes to just 18,000 – seven years on, companies are getting back on their feet but we're determined to give them all the help they need. Access to finance is one of the biggest challenges they face – so that's why today I'm launching this £100m commitment to help our smaller builders fund new projects, expand their businesses, create more jobs and build more homes. With housing starts at a seven-year high and climbing, and homes granted planning permission at 261,000 – the highest since 2007, this work will ensure we maintain this momentum and keep the country building."

Brian Berry, chief executive of the Federation of Master Builders, responded: "There has been a sharp decline in the numbers and output of SME housebuilders over the past eight years. One of the biggest obstacles these firms have faced is a severe difficulty in accessing finance. Without adequate access to finance they cannot bring forward the number of new homes they would otherwise. The new Housing Growth Partnership will directly help to address this issue and the additional £50 million greatly increases the scale of what can be achieved. We commend Lloyds Banking Group and the government on their trailblazing approach and we hope this marks a real turning point in the fight to provide adequate finance to the SME house building sector."

The Housing Growth Partnership is seeking to invest alongside small and medium-sized housebuilders who, on average, have 10 to 100 single unit completions annually over the past three years, and who have a proven track record in land buying, design, construction, marketing and sales of new homes. It will support residential development projects with a gross development value of between £0.75m and £12m, and will offer investments in the range of £0.5m to £5m for each project.