Homes England’s affordable housing director says warning signs would arrive midway through 10-year initiative, as programme in London reportedly ‘oversubscribed’
It is “too early to tell” if the Iran war will impact delivery under the government’s £39bn social and affordable homes programme (SAHP), a Homes England director has said, after several housebuilders warned of impending market volatility due to the Iran war.
Speaking to Housing Today at the Chartered Institute of Housing’s (CIH) Housing Brighton conference this morning, Shahi Islam, director of affordable housing at Homes England, said that if the SAHP were to be adversely affected, the warning signs would appear later in the 10-year programme once schemes are ready to be built out. The programme is expected to deliver around 300,000 homes over 10 years.
In recent weeks several housebuilders have warned of their concerns about the impact of rising materials prices as a result of the Iran conflict, which has led to disruption to key shipping route the Strait of Hormuz.
Crest Nicholson has forecast a drop in profit, while Bellway has warned of impending market volatility.
Taylor Wimpey last week warned material cost inflation is already starting to be seen in its supply chain.
However, speaking on the same conference panel, Ian McDermott, chief executive of 109,000-home housing association Peabody, suggested appetite for bidding remains strong in London.
He said he had been in contact with the Greater London Authority - which adminsters the programme in the capital - who told him bids for SAHP funding are “significantly oversubscribed”.
Audience member and Kent Housing Group chair Brian Horton, raised concern over the “oversubscribed narrative”, which he said “seems counterintuitive in terms of what’s going on within the sector” regarding the under-delivery of social and affordable homes.
In response, Islam said that oversubscription does not necessarily translate to over-delivery.
He said the use of strategic partnerships within the programme on top of its large budget is likely to generate strong interest, particularly during the first three to five years. However, this does not mean that all bids will receive allocation.
The previous Affordable Homes Programme was disrupted by rampant inflation in the wake of Russia’s 2022 full-scale invasion of Ukraine. Many registered providers renegotiated their agreements with Homes England as a result.
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