Barratt and Lloyds Banking Group have launched a £150m joint-venture with the government body Homes England that will lead to the UK’s largest housebuilder and mortgage provider capitalising on Labour’s plans to build 1.5m new homes.

The combined venture, known as the MADE Partnership, will oversee multiple large-scale projects, including town extensions, new garden village-style communities and brownfield developments, each made up of 1,000 to 100,000 homes and community facilities.

The government’s housing and regeneration body, Homes England, said the partnership would “ have the finance, tools, expertise and partners required to ensure a cohesive approach to delivering a fabulous place that people want to live and work”.

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The venture will initially be backed by up to £150m in funding, provided by Barratt, Homes England and Lloyds, which will hold equal equity stakes.

But while MADE has been described as a “long-term partnership”, the announcement of its launch on Monday did not included any timescale or housebuilding targets.

The joint-venture comes as the UK government tries to deliver on plans to build 1.5m new homes over the next five years, in order to address the UK’s housing crisis. Ministers have pledged to reintroduce mandatory housing targets, and take swift action to clear bureaucratic backlogs to boost housebuilding, as part of a wider overhaul.

Housebuilders and mortgage providers across the UK are keen for a boom in home construction across the UK, and Barratt said last week that the Labour government’s planning reforms could increase activity across the industry.

The housing and planning minister, Matthew Pennycook, said: “A failure to ensure the development system is working properly has held back the delivery of tens of thousands of new homes over recent years and this government will work in partnership with all those who are focused on turning things around.

“The landmark new partnership announced today will support our commitment to ramp up housing supply and boost economic growth by developing more large-scale, attractive and sustainable places across the country with the homes, jobs and infrastructure that communities need to thrive.”

MADE will act as a “master developer”, meaning it will oversee and manage the development of large projects, including overall vision and strategy. That will include handing planning, installing primary and community infrastructure and ensuring “robust long-term stewardship is put in place”.

The Lloyds Banking group chief executive, Charlie Nunn, said: “This is the cross-sector collaboration we need, at significant ambition and scale.”

The announcement comes two months after Lloyds announced it was expanding its private rental arm, Citra Living, to become the first UK bank in the affordable housing market, in which rentals are offered to struggling households at 80% of market rates. Citra was launched in 2021 to diversify income from traditional lending. With UK households facing a chronic shortage of new homes and near-record house prices, there will be consistent demand for affordable housing, and a reliable source of income for owners.