Reprofiled £11.5bn Affordable Homes Programme set to deliver less than 157,000 homes

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Homes England’s £11.5bn affordable homes programme is expected to undershoot a lowered estimate for delivery, a senior official for the government agency has confirmed.

The programme was originally expected to deliver 180,000 homes, however the National Audit Office said in September 2022 it forecasts completions to be 23,000 homes fewer.

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Shahi Islam, director of affordable housing at Homes England, has now confirmed to Housing Today that completions will be “some way” lower than this revised 157,000-home target.

The rise in inflation since the mini-budget last year has prompted Homes England and the Greater London Authority (which administers the programme in London) to increase grant rates where housing associations are struggling to make projects viable as a result of the increased costs.

Islam said: “If you’re introducing higher grant rates and do more social rent, then there will potentially be a compromise on numbers,” he said, agreeing that the overall figure will now be “some way south” of the NAO’s figures.

>> See also: Can housing associations again keep development going as the rest of the market slows?

>> See also: Housing Today calls for affordable housing funding review and planning overhaul

Last month Homes England chief executive Peter Denton told MPs on the Levelling Up, Housing and Communities select committee that numbers in the programme would have to fall because of the decision to raise the grant rate in face of adverse market conditions, and to build more social rented homes.

However, junior housing minister Baroness Scott, appearing before the same committee, refused to say how much the programme will reduce by, with the minister saying the government will set out new targets “in due course”.

In London, the GLA had been originally expected to deliver 35,000 homes with £4bn of grant, but last year agreed to deliver between 23,000 and 27,000 for the same funding.

Tom Copley, deputy mayor for housing at the GLA, said delivery has been further hampered by what he calls a “chaotic and haphazard” implementation by the DLUHC of rules requiring second staircases on high-rise buildings.

See Housing Today tomorrow for Joey Gardiner’s in-depth analysis of the Affordable Homes Programme

A Fair Deal for Housing

A fair deal 3x2

Housing Today’s A Fair Deal for Housing campaign is calling for the government to launch a review to look how to increase affordable housing delivery to 100,000 homes a year.

This should consider overhauling existing funding for affordable housing so that a more ambitious programme can be delivered. 

The report suggests the review could look at grant rates for affordable housing, a longer-term rent settlement for social housing providers, a time-limited stimulus package to counteract the high cost of private funding and at mechanisms to lever in more institutional finance for ‘for-profit’ registered providers.

The campaign is also caling for measures to reform the planning system, boost private housing delivery and make regeneration easier.

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