Ministers have belatedly launched a multibillion-pound loan guarantee scheme for housebuilding, more than two years after it was first announced.

Labour accused the government of dithering after it appointed Venn Partners, the investment management company, to run the programme.

Under the plans, a government guarantee will underwrite loans to companies looking to invest at least £10m in building new homes available to rent. This will bring down the cost of borrowing, with the hope of boosting the supply of private rental property.

The guarantee is half of an incentive package intended to spur the development of large housing projects for rent. Unveiled in September 2012, David Cameron said at the time it was proof that the government was “serious about rolling its sleeves up” to help kick-start the economy.

The other half of the plan, a separate £3.5bn scheme for housing associations, was set up in 2013 under the auspices of the Housing Finance Corporation.

That scheme has already guaranteed more than £1bn of investment in 9,000 new affordable homes on some of the cheapest terms in the sector’s history, according to the government.

But the private rental scheme was in limbo for a long time because of problems finding a company to run it; the communities department was nearly forced to run the scheme itself.

In June 2013, the then housing minister, Mark Prisk, claimed the scheme was already “open for business”, but this was not the case.

It took another 18 months before Brandon Lewis, the current housing minister, was able to announce the details of the programme in the run-up to Christmas.

Emma Reynolds, shadow housing minister, said the delay proved that the government was “all talk and no action”.

“David Cameron should be embarrassed that over two years after he announced this scheme and he said he was ‘rolling up his sleeves’ to tackle the housing crisis — literally nothing has happened,” she said. “The government has only just found someone to run it.”

Ministers want property investors and pension funds to put money into the growing “build to let” sector to ease the shortage of new build property in the UK.

An official report in 2012 by Sir Adrian Montague highlighted the need for more institutional investment to increase the supply of new high quality homes for rent.

Mr Lewis said the new agreement with PRS Operations, a subsidiary of Venn Partners, had the potential to unlock £3.5bn of funding for new homes for private rental that would be “professionally managed”, in contrast to much of the sector.

The minister dismissed any suggestion that the government had struggled to find an operator, insisting there had been a competitive procurement tender with “multiple strong bids”.

Rob Hill, finance director of Essential Living, a private landlord, welcomed the news: “‘The appointment of Venn to manage the new £3.5bn fund is incredibly positive news for the sector,” he said. “The partnership boasts a high degree of expertise in residential investment.”

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