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Question marks over the next grant programme could mean affordable housing does not get built
While the new £12bn Affordable Homes Programme is welcome news, housing providers could miss out on vital opportunities if they don’t get clarity soon, writes Jonathan Jarvis
As we emerge from the dark days of lockdown, it will be the speed at which sectors can move forward with confidence that will determine how quickly the economy bounces back.
One thing the government could do that would help the social housing sector to move forward quickly is to put in place its new Affordable Homes Programme as quickly as possible.
A protracted delay in housing providers being able to secure grant commitments may result in lost opportunities to provide the social housing the country so badly needs.
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That is not to say that the government has not already taken big strides to help the sector get going again. Robert Jenrick’s announcement that the government has agreed to extend the longstop date for schemes that have been approved under the 2016/21 Affordable Homes Programme has been well received by the sector.
Providers with schemes that have already been approved will now have until 31 March 2023 to have “shovels in the ground”.
The government believes the extension will support the completion of 400 residential developments, comprising up to 24,000 new homes, that might not otherwise have been delivered. So this is undoubtedly good news.
However, it is not entirely clear from the announcement whether the extension will apply to any affordable housing schemes that are yet to be approved under the current programme, assuming funding remains available to be claimed.
The new, £12bn affordable housing programme covering 2021 to 2028 is designed to deliver 180,000 affordable homes. What isn’t known is the detail of the programme and how quickly providers will be able to secure commitments for grant
Questions about the programme include:
- What will be the desired tenure mix? The recent announcement confirmed that houses let at a social rent will be included; but will, as some have speculated, the focus be homeownership?
- If it is to focus on homeownership, will we see a relaxation of the grant condition that a purchaser must acquire a minimum 25% stake in the property? If access to mortgage finance hardens, this condition may limit take-up and make delivery of the government’s target more challenging.
- What will be the timetable for its implementation? This is particularly important if there is only a limited amount of funding available for further schemes under the current programme.
Until the new programme is in place and a grant commitment secured, a provider will be reluctant to enter into a contract with a developer to acquire property. In some cases, that will mean deals do not happen and the affordable housing that was planned does not get built.
One viable option open to not-for profit housing providers (including local authorities) would be to become the delivery partner of a member of Homes England’s strategic partner programme. The new partner, particularly if it accepted challenging delivery targets to secure its appointment, may welcome the opportunity to bring the provider’s schemes within its own programme.
Nevertheless, social housing providers and developers alike will be hoping that the new programme is implemented swiftly.
There remains enormous potential for the social housing sector to flourish in the current environment. But time is of the essence in providing the clarity providers need to move forward on schemes and preventing a hiatus in new schemes being committed.
Jonathan Jarvis, partner, Devonshires
