Agency asks providers to reconsider grant expectations for early years of 10-year initiative, while GLA deadline for revised bids under ‘oversubscribed’ London programme passes

Homes England has written to registered providers asking them to rethink their expected timelines for grant payments under the £39bn Social and Affordable Homes Programme after a high volume of applications.

ritchie and rees

(l to r) Pat Ritchie, chair, and Amy Rees, chief executive, of Homes England at UKREiiF in Leeds this week.

The agency, which administers £27bn of the funding outside London, is currently assessing initial bids with allocations expected to be announced in the Autumn.

Shahi Islam, director of affordable housing at Homes England, speaking at the UKREiiF conference in Leeds this week, said the agency is asking bidders to “reconsider their grant draw down” in the early years of the programme. He stressed the agency is not asking providers to scale back overall homes in their bids under the 10-year programme as this would compromise the bidding process.

Under the SAHP, bidders must set out the timescales for delivering homes and when they expect to receive grant payments. Grant funding is then paid quarterly in arrears based on development expenditure incurred (except for the developer delivery route which is linked to specific development milestones).

The amount of overall funding for the programme in each given year is limited by the Treasury however, so the agency must make sure grant payments are spread across multiple years.

He said: “We’re not asking partners just to resubmit their bids. It’s very much an individual conversation with each of those bidders around their budget profile annually over the 10 years.”

Amy Rees, chief executive of Homes England later told journalists,: “We have pushed people to do early delivery in the first three years, but we have to make sure the drawdown of their funds is really stuck to the delivery that we’re going to get, because obviously what we don’t want is money to be sitting with a partner in their bank account that isn’t used until later.”

She added that providers have “stepped up and been ambitious” but the agency is now working to ensure the ambition “fits the profile” of what the agency can deliver.

Asked if this request to reprofile grant will affect delivery, Rees said: “If we get that wrong…it will affect delivery, because either there won’t be enough money for them to do what they need to do, or there’ll be money sitting around that could have been actively used somewhere else.”

Meanwhile a deadline for registered providers in London to make a revised bid for grant under the London Social and Affordable Homes Programme passed at noon on Tuesday.

The Greater London Authority, which administers the £11.7bn to be allocated in London, wrote to providers to say the scheme is ”substantially overbid”.

It said: ”We are therefore offering bidders the opportunity to review their proposals and make a revised bid which provides the highest possible level of delivery confidence and value for money, in what is a highly competitive bidding process.”

Rees also told Housing Today that interest in the £2.5bn of low cost loans announced earlier this year has been very high. “I can legitimately say that has been huge,” she said, adding that there has been demand for the loans outside London, with providers using them to compliment grant funding.

The low cost loans model was first set out Housing Today and the G15 in their State of the Capital report last year.

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