The Affordable Homes Programme (AHP) will see several changes introduced for 2021-26 in response to changing market conditions, which will include social rent-specific grants and bringing homes originally intended for market sale into the scheme. The hope is that with the updated guidance, registered providers (RPs) can more easily deliver affordable housing in the areas of highest need or unaffordability.

In this insight we will explore the previous and current positions and what this means moving forward for RPs.

The previous position

The AHP provides grant funding to RPs in England to support the costs of delivering much needed affordable homes and since its launch in 2010 has distributed billions of pounds. Previously the grants were limited to new build projects only, however Homes England has updated their guidance in recent days in a response to changing market conditions.

What has changed?

In an update to the guidance at the end of February 2023, Homes England (HE) have shifted to prioritising social rent through social rent-specific grant rates and will consider funding for acquisitions where there is a need for near-term delivery to keep the market moving through:

• acquisitions of unsold new build homes
• forward funding of new build delivery or contributions towards supported housing delivery through remodelling
• improving existing housing stock.

However, HE has acknowledged that RPs may not be keen to pursue market-sale risk associated with delivering home ownership tenures and as a result will look to be more flexible in its approach to assessing the strategic fit or proposals with routes into home ownership.

What does this mean for RPs?

The update to the guidance shows HE are looking to adapt to the ever-changing market conditions to ensure that affordable homes are delivered as efficiently as possible.

The opportunity for RPs to deliver affordable homes in the near term by bringing homes intended for market sale under the scheme will aid in the contribution to an ongoing supply of new affordable housing and will help to keep the housing market moving.

RPs should review their own delivery programmes to ascertain how these changes to the guidance can help them execute their programmes and whether they can capitalise on these changes to help them deliver affordable homes in the most efficient way.

How Capsticks can help

If you have any queries around what's discussed in this article, and the impact on your organisation, please speak to Susie Rogers and Lucy Bradbury to find out more about how Capsticks can help.