The government is set to miss its target of having helped start 10,000 new build-to-rent homes through a £1 billion fund launched two years ago.
When it introduced the Build to Rent fund in 2013, the Department for Communities and Local Government said between 8,000 and 10,000 homes would be under way by this year.
However, DCLG figures released to AJ sister-title Construction News show that only 4,000 homes are currently being delivered as a result of the funding.
At the time of launch, the then housing minister Mark Prisk said the fund would help ‘get Britain building’, with ‘up to 10,000 new homes to be built’ through the initiative.
A DCLG spokesman said: ‘To date, 15 schemes worth £456m are under contract, delivering over 4,000 new homes for market rent.’
The Build to Rent Fund was designed to increase the number of homes constructed specifically for private rent by offering government loans to developers to cover costs for land, construction or management.
The DCLG initially made £200m available, but this was increased to £1bn in the 2013 Budget after the Homes and Communities Agency – which manages the fund – said it had been oversubscribed.
The money was split into a two-phase process, with first-round bidders originally due to receive £700m and the remaining funding distributed in the second phase.
However, the first-round allocation was slow to take off and the money available in round one was reduced to £300m, with the remainder of the pot going to schemes in the second phase.
But DCLG figures show that only £130.6m (out of £300m) was allocated in round one and £325.4m has been allocated to date in round two (out of £700m).
The spokesman said further deals were expected to be concluded ‘over the coming months’.
He added that the government’s involvement in the sector had seen a further 3,000 homes built specifically for private rent, without the need for direct funding.
‘These are homes created via schemes which applied to the Build to Rent fund but have ultimately progressed using only private finance,’ he said.