The Homes and Communities Agency has written to social housing landlords, who have secured deals from the Affordable Homes Programme, pledging to pay a ‘start on site’ lump of cash for new build schemes that break ground by 31 March.

Its move to spur on house building comes a week after agency figures showed a complete collapse of housing starts across Britain.

In the six months to September just 454 affordable homes started compared to 13,402 in the previous period.

The figures caused political embarrassment for housing minister Grant Shapps, with claims from Labour that the dreadful figures were released a day after the Government’s Housing Strategy to bury bad news.

The HCA has signed off around £1.3bn of the total £1.8bn allocated to house builders and housing associations under the Affordable Housing Programme in recent weeks.

Bbut there is growing concern within Whitehall and among builders that precious housing work will not get started until later next year.

As a result the HCA has been given the green light to offer early cash incentives to get diggers rolling on site. This will involve an interim payment of 75% of the agreed grant, payable once starts have been confirmed, with the balance payable at completion.

For schemes on site after March 31, grant will only be released after the homes have been completed in line with the original terms of the AHP deals.

Rob Young, JV North chairman and CEO at Helena Partnerships, said the landlord was looking to get just over 60 units on site by March next year.

He said: “We’ve all been encouraged to see if we can get more schemes started on site by 31 March.

“The incentive for that is that rather than waiting to produce the units in two or three years time and get paid then, they’ll be paid 75% up front.”