Housing secretary and deputy prime minister Angela Rayner announced a surprise funding top-up last week. Here is an at-a-glance guide to how it will work.
The government last week surprised everyone by announcing a further £300m top-up to the existing 2021-26 Affordable Homes Programme (AHP)
Ministers believe this latest funding, which follows a £500m top-up previously announced in the autumn budget, will enable 2,800 extra homes to be built, with around half for social rent. A total of £60m will be available for homes in London with £240m for the rest of England.
The funding has been welcomed by the sector, but many social housing leaders have warned much more will be needed, along with rental income certainty for the coming years, to enable the delivery of the homes we need.
So how will the funding work? The £300m is a top-up to the existing AHP and many of the same processes are in place. But given the fact we are nearing the end of the 2021-26 programme, it is worth us clarifying how to bid, what can be funded and the timescales and deadlines involved.
When will the bidding open? When is the deadline for bids?
The bidding is open now, providers can submit their bids to Homes England here, or to the Greater London Authority in London here.
There is no single deadline, but rather a rolling process, with each project being allocated individually.
What’s the deadline for starting and completing schemes?
Providers will be able to bid for a slice of the £300m through continuous market engagement (CME) – a funding route that allows bids to be made at any time during the programme.
They can also bid through strategic partnerships- longer-term funding agreements to deliver a set number of homes usually across multiple sites.
Schemes funded through CME must start on site by 30 September 2025 and be completed by 31 March 2026.
The Greater London Authority has said for its programme it expects starts by April 2026, with most completions expected by 2028.
Schemes funded through the strategic partnerships route should be completed by the end of March 2029, the original programme deadline. However, in July last year, ministers confirmed that the government would allow flexibility in London to respond to delivery pressures.
Will the grant be available for section 106 homes?
None of the £300m grant will be available for section 106 homes. The AHP grant cannot be combined with section 106 contributions, but there is nothing to stop some developments having both section 106 and AHP-funded homes on them.
The government is however looking to improve the existing system of developer contributions following a drop in demand for buying section 106 homes from housing associations. It is expected to set out details later this year.
What tenures are being funded?
Programme funding can only go towards new homes for social rent, affordable rent (outside London), shared ownership and rent to buy.
How many homes will be delivered and what is the grant rate?
The government has said the £300m will deliver 2,800 homes across England, of which half will be for social rent. This works out, by a crude calculation, as an overall grant rate of £107,000 per unit. However the social rent homes will by definition have a higher grant rate than the tenures.
How will government ensure half are social rent homes?
Ministers have asked both Homes England and the Greater London Authority to prioritise social rent homes and the government has said it expects more than half of the homes to be for that tenure. However, it has not set specific targets to achieve this and the final mix is heavily dependent on the type of bids received.
See also: ‘Welcome, but much more is needed’ – social housing sector reacts to £300m top-up to AHP
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