Affordable Homes Programme deadline leaves builders unable to access £500m top-up

Inside Housing understands Homes England is likely to spend much of its share of the top-up on larger housing providers known as strategic partners, which have access to longer funding time frames, as opposed to the continuous market engagement (CME) route used by most social landlords.

Experts have also suggested that registered providers might use the top-up funding to buy homes off the market from house builders.

Ryan Mitchell, managing director of Greenstone Property Developments, told Inside Housing the £500m top-up to the AHP was “certainly a step in the right direction”, but said its funding deadlines “threaten the delivery of new affordable housing”.

He said: “The grant funding is tied to the present 2021-26 AHP, with the practical result that new build housing is now stalling at a time just when 1.5 million homes are promised.

“Government has not thought this through, as the present programme requires all projects to be completed by March 2026, with only limited extensions offered to October 2026.

“The result of this means that medium to large-scale new build site starts are simply not possible. Construction timelines don’t fit the restrictive 15-month window to access grant funding for new build delivery.”

Mr Mitchell, whose organisation develops affordable housing for London boroughs, said the funding conditions “don’t allow our new build starts on site, with the result that crucial new build delivery is significantly delayed”.

He added: “By extending funding deadlines and aligning grant policies with the realities of construction timelines, we can unlock the full potential of this investment.”

Patrick Murray, executive director of policy and public affairs at the Northern Housing Consortium, told Inside Housing his organisation had campaigned to extend the time frames of the current AHP. However, he said, “it’s still very useful to get £500m and it will get spent”.

Mr Murray said he knew “people who had schemes ready to go” that could be completed by 2026, but Homes England “had just run out of money” to fund them.

He accepted the £500m top-up may not help some providers because of time constraints, but said “if you’re in that position, hold out for a few more months… There is a new programme coming in the spring, and potentially on better terms.”

Housing providers hope the government will announce a bigger, multi-year AHP with a greater focus on social rented homes at the spring Spending Review in late March.

The current AHP was announced in spring 2020 and began distributing grant in November that year. Going by that roll-out, funding for a potential new programme could be available by the end of 2025.

Catherine Ryder, chief executive of PlaceShapers, said: “It is understandable that housing associations are considering all of their options for quickly increasing the supply of affordable homes, given the escalating housing crisis.

“However, our members have told us that they have schemes that could complete by the deadline as they are ready to go, and were just about to bid for funding before the money in the AHP effectively ran out.

“We have shared examples of these with the housing minister, and hope they will now go ahead without further delay, as they will immeasurably improve the lives and homes of people who have already been waiting decades for their communities to be transformed, due to the lack of funding.

“We’d also urge the government to be as flexible as possible in how they allocate this additional funding, to allow housing associations to play their part in the government’s target of building 1.5 million homes over this parliament, particularly as we transition to a new funding programme in 2026.”

Will Jeffwitz, head of policy at the National Housing Federation, said: “At a time when new affordable and social housing is needed more than ever, the £500m top-up to the AHP will be vital to unlock delivery of new social homes that were stalled because the current AHP had run out of money.

“Housing associations share the government’s ambition of building 1.5 million new homes over the next parliament and are ready to build the affordable homes needed, but they need the right support to do so.

“Alongside this immediate top-up, we’re continuing to call on the government to provide certainty on the long-term future of the AHP by confirming the details and scale of the next programme in the spring Spending Review.”