The first ten struggling developments to receive rescue funding under the Government’s Kickstart programme were announced this week, chosen from a shortlist of 270 stalled projects. The scheme has a £1.06 billion budget to restart the construction of 22,000 homes before next March.

The developments getting the go-ahead will provide 740 homes in sites across England, from Cleveland to Kent. John Healey, the Housing Minister, said that construction workers on the first project would be back on site next month.

There will be another chance for housebuilders stymied by the recession to bid for government cash in the second round of the Kickstart prograthis autumn. A new (rather vague) proviso stipulates that this time developers must also “offer apprenticeships and jobs to local people”.

Kickstart should help the struggling construction industry. The property market is showing tentative signs of recovery and the number of homes being built has started to rise again, but the figures are still well below the Government’s target of 70,000 affordable new homes a year.

Healey emphasises, however, that “this is not a handout to developers”. Less than a fifth of the £1.06 billion is being awarded as direct grants and almost half the money must be repaid within five years.

The Kickstart scheme is not the first to bail out mothballed developments. It complements regional rescue packages administered by the Government’s housing and regeneration body, the Homes and Communities Agency (HCA). A recent example is the cash injection given by the HCA’s London board to Hale Village, a huge project of 1,200 homes, student accommodation, a hotel and shops in Haringey, North London. The development, which is expected to trigger further regeneration in one of the capital’s poorest boroughs, received £3 million in the spring to get the builders back on site.

The funding will help Lee Valley Estates, the developer, and Newlon Housing Trust, a housing association, to complete the first phase, which includes 314 homes and almost 700 student flats. Builders are working hard to finish the brightly coloured student block that overlooks Tottenham Hale station. Students, who are expected to arrive this month for the start of the university year, will be living on a 12acre building site, but at least the roof is finished.

The project was halted in February 2008 after the private developer that had been drafted in to construct five blocks of 64 flats pulled out because of financial difficulties.

The sale of these private properties was originally expected to bankroll much of the scheme, helping to pay for the infrastructure for the student accommodation and social housing. But the property market crash and credit crunch changed all that. The project would have been unable to continue without government money.

Colin Dixon, the managing director of United House, Hale Village’s construction company, said: “We have done well to survive. This is a significant scheme for Haringey and the £3 million was crucial to keep it alive.” But the money will rescue only the first phase; more will be needed to complete the rest of the project. Hale Village Properties, the owner of the site, is negotiating for further government support that could exceed the initial rescue package.

United House is hoping to win further contracts to take over the semi-built blocks of flats intended for the open market. Progress is slow. As Dixon puts it: “We may have turned a corner but nobody feels like celebrating just yet. Nobody wants to make a quick decision in the current climate.”

For a full list of construction projects receiving Kickstart funding, visit: communities.gov.uk/news/corporate/1334542

Fast Facts

- Tottenham is one of the cheapest areas of London, with a reputation for crime and grime.

- The property boom might as well never have happened here; a year ago, the average two-bed flat was worth £176,528. Now, it is worth £146,541, 1.4 per cent less than in 2004, says Hometrack.

- Local estate agents say that the nicest area, which borders Turnpike Lane: attracts buyers priced out of Finsbury Park.

- More than 46 per cent of homes in Tottenham are rented from the council or housing associations, according to census figures.

- The average two-bedroom flat in the area costs £154,519, a drop of 11.8 per cent since last year, according to Hometrack.

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