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Regeneration projects could become ‘unviable’ under new £4bn London grant programme

Key sector figures have warned that some estate regeneration projects could become “unviable” under the Greater London Authority’s upcoming Affordable Housing Programme as it confirmed it would not be providing funding for replacement homes.

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“I believe estate regeneration, which already involves additional costs of demolition and loss of rental income, will become more expensive and unviable in some instances,” said @G15London #UKhousing

Helen Evans, chair of the G15 group of housing associations, said: “The new programme will mean that grant funding will only be available for additional homes in estate regeneration.

“This is a big change from previous programmes, the extent to which it makes a difference will depend on how much the estate is being densified.

“I believe estate regeneration, which already involves additional costs of demolition and loss of rental income, will become more expensive and unviable in some instances.”

Read our analysis: How will the £4bn programme affect development in the capital

Last week, the Greater London Authority (GLA) unveiled the details of its upcoming £4bn Affordable Homes Programme (AHP) which is set to run from 2021 to 2026.

In the guidance, the GLA stated the programme would provide funding for estate regeneration projects where “the grant is used for additional homes” and added that “funding will not be available for units that replace homes that have been, or will be, demolished”.


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The rules bring the GLA’s programme in line with the wider AHP being delivered by Homes England, which will also not fund replacement homes.

The GLA’s guidance states it will “consider funding these replacement homes in exceptional circumstances”, such as if homes have become “obsolete”.

Guy Slocombe, chief investment officer at Hyde, said he hopes the regeneration rules are “a broad generalisation” and that “some of the homes that are being regenerated are being regenerated because they are no longer fit for purpose”.

He continued: “Hyde has experience of large-scale regeneration which involves replacing homes that would not meet the decent homes standards. I believe that grant should be provided to replace these homes and I hope that... regeneration projects will be considered on their own merit.”

Vicky Savage, London managing director at L&Q, said: “We’re considering the implications of the grant funding conditions for regeneration projects closely, as these may have an impact on the future delivery of schemes. This will take time to assess.”

The GLA has been allocated 35% of the £11.5bn available through the government’s upcoming five-year AHP.

It has been announced that 50% of the homes funded via the GLA’s scheme will be for social rent.

This marks a huge shift from the current AHP in London, in which roughly 65% of the homes were to be for shared ownership or London Living Rent, a tenure designed to allow middle-income Londoners to save for a home.

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