A Freedom of Information request from the BBC to the Homes and Communities Agency, responsible for the scheme, uncovered the underwhelming take up of loans from the Builders Finance Fund. Builders are invited to bid for a loan once planning permission has been approved for a development.
Bidding for the finance began in May 2014 and was set to remain open on a continuous basis until the end of March this year or until the fund has been allocated. All funds must be drawn down by 2017.
The BBC’s request revealed two builders had been awarded loans. Cornwall-based Poltair Developments was offered £1,869,046 for a project near Padstow and has drawn down £659,522. Hallmark Developments, a firm in Essex, has secured and withdrawn £400,000 for a development near Braintree.
The rules of the fund have been criticised by builders as being too complex to understand.
The government said the scheme had attracted high levels of interest from builders and many projects would be approved for loans.
The government published its Housing and Planning Bill yesterday which gave details of its key initiatives to tackle the housing crisis including the Starter Homes Initiative and a clampdown on rogue landlords. Housing minister Brandon Lewis said the Bill marked the start of ‘national crusade to transform generation rent into generation buy’.
Another objective of the proposed legislation is to reform planning to support small builders and grant automatic planning permission in principle of brownfield sites.
