A senior Housing Corporation official has admitted there will be unease if only a few private housebuilders receive social housing grants in the pilot programme.

Talking about the £200m New Partnerships in Affordable Housing programme at last week’s National Housing Federation conference, John Carleton, the corporation’s northern field director, said: “We would feel enormously uncomfortable if it gets down to one or two.”

Eight firms have been shortlisted for the programme, designed as a testbed for the opening up of the entire social housing grant programme to private companies.

But Carleton said the corporation was happy with how the government was sifting the bids.

He also said the corporation wanted to explore how to provide financial support in the form of equity and gap funding rather than grants.

Ashley Lane, Westbury Homes director, predicted that few firms would follow Berkeley’s lead by becoming a registered social landlord.