£525m Builders' Finance Fund: Only £1m allocated
- 15 October 2015
- From the section England
Builders have been given only £1m of a £525m fund to kick-start construction of houses in England, it has emerged.
The government's Builders Finance Fund (BFF), launched in April 2014, aimed to "unlock" hundreds of housing projects stalled by the economic slowdown.
But just two projects have so far benefited from the fund which ends in March 2017.
The government said there had been "high levels" of interest from builders and "many" schemes would get funding.
The government has set a target of building one million homes by 2020 after a number of years in which targets have been missed.
Initiatives include BFF which offers loans to builders with planning permission for between 15 and 250 homes.
When it was launched, the government called it a "key part" of its long-term economic plan.
"Work on nearly 13,000 homes stalled by the 2008 housing crash are set to be restarted thanks to half a billion of government investment," the Homes and Communities Agency (HCA) said in September last year when it announced 160 schemes had been shortlisted for funding.
But a response to a BBC Freedom of Information request the HCA revealed only two schemes, in Cornwall and Essex, have benefited so far:
- Poltair Developments has been offered £1,869,046 for its Trecerus Farm project near Padstow, of which £659,522 has been drawn down.
- The full offer of £400,000 has been lent to Hallmark Developments for its Priory Hall project near Braintree.
Rico Wojtulewicz, policy advisor for the House Builders' Association, said builders had doubts over the fund's viability or found the rules too complicated.
"The government stated that the fund would bring 13,000 new homes but that has clearly not been the case over the past year," he said.
"More attention should be put into how to increase take-up."
Sarah McOnagle, of the Federation of Master Builders, said: "We are disappointed that take-up is so low.
"We want to work and try to change it and make it more simple to access."
Norman Ewen, finance director of Hallmark Developments, said the funding would make 20 homes ready by Spring 2016, a year earlier than without the funding.
He added: "We totally underestimated the complexities of the loan security arrangements and also how long it would take for the lawyers to all agree on the wording of the various documents."
Poltair Developments chief executive Ron Ley said the BFF loan had led to the building of 22 homes on the Padstow site.
"The fund is about delivering the houses that the country desperately needs and the HCA led us through the process extremely well," he said.
"But building more houses is not just about funding - it's also about tackling the very long planning process and the numerous conditions associated with it."
Housing Minister Brandon Lewis said: "There have been high levels of interest in this scheme that will deliver thousands of homes for hard working families.
"We are considering 86 bids for funding worth more than £250m as well as having already signed eight contracts for £11m and a further 33 contracts worth £68m are in the process of being signed.
"The remaining funding is available to support house builders between now and 2017."