Commercial housebuilders are preparing to bid for social housing grants for the first time, having won the go-ahead last month with the passage of fresh legislation.

Taylor Woodrow says it will make a bid for a grant from the Housing Corporation for sites across the country. Bellway Homes, David Wilson Homes and Miller Homes have also expressed interest.

The Housing Act, which gained royal assent on 19 November, means that not-for-profit registered social landlords no longer have a monopoly over funding for affordable housing.

Under the legislation, private sector housebuilders and others in the private sector are permitted to put in bids for rented property and shared ownership to the Housing Corporation and the Welsh assembly.

The corporation intends to set aside £200m for non-RSLs in the next bidding round in February.

Last week it published a policy document explaining how it expected the funding process to work. Under these draft proposals non-RSLs would be expected to enter a framework contract.

The proposals hold no concern. It is something to go for

Terry Fuller of Taylor Woodrow

Terry Fuller, Taylor Woodrow partnering director, said: “The proposals in the document hold no concerns at all. This is something to go for.”

Fuller added that the firm was not worried by the prospect of entering a framework contract with the corporation. He said: “We entered a similar contract with the government under the Starter Home Initiative several years ago to provide 20 homes for teachers for a site in Chelmsford, Essex. With the grant we built 42 homes.”

The £200m slice of the market that is now on offer is a fraction of the £1.5bn a year programme, but the corporation says it will free up more money if this pilot is a success. At a conference last week, Jon Rouse, chief executive of the corporation, said: “We want the best providers of housing and we are less interested in where they come from.”