Government to confirm lowered Affordable Homes Programme delivery target ‘shortly’

The Department for Levelling Up, Housing and Communities (DLUHC) will soon confirm its lowered target for its £11.5bn affordable homes programme (AHP), a senior civil servant has said.

DLUHC permanent secretary Sarah Healey, in correspondence with fellow civil servant and new AHP lead Emma Payne, re-iterated that the 2021-26 programme is “very unlikely” to hit its original target of 180,000 homes.

Healey said: “The AHP was launched in September 2020 with a public commitment to invest £11.5bn to deliver up to 180,000 affordable homes right across the country should economic conditions allow.

“We have already identified that the programme is very unlikely to deliver 180,000 homes due to economic changes and so we note that you will confirm new delivery targets shortly, when the overall figures are ready to publish.”

The National Audit Office said in September 2022 that it expected the AHP to deliver 157,000 homes – 23,000 fewer than originally expected – due to building cost inflation and labour and materials supply issues. However, this was before the economic impacts following the short-lived Truss government’s mini-budget.

>>See also: ‘The figures on starts are terrifying’. What’s really happening to the Affordable Homes Programme

Shahi Islam, director of affordable housing at Homes England, told Housing Today earlier this year that completions will now be “some way” lower than this revised 157,000-home target.

In January, Homes England chief executive Peter Denton told MPs that numbers in the programme would have to fall because of the decision to raise the grant rates in the face of adverse market conditions and to build more social rented homes.

However, junior housing minister Baroness Scott, appearing before the same committee, refused to say how much the programme will reduce by, with the minister saying the government will set out new targets “in due course”.

The comments from Healey were made in a letter to civil servant Emma Payne upon her appointment as ‘senior responsible owner’ of the AHP.

A DLUHC spokesperson said: “The housing sector has experienced an increase in the cost of borrowing and materials due to wider economic pressures. “The government is working with its partners to ensure that the programme is delivering effectively in light of these economic challenges.” 

He added that the new target will be published “shortly” but declined to be more specific about the time of publication or the likely level at which the target will be set.