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Details of next five-year Affordable Homes Programme not expected until spring 2025
The government’s next five-year Affordable Homes Programme (AHP) is not expected to be announced until spring 2025, Inside Housing has learned.
Chancellor Rachel Reeves will present her first Budget on 30 October and Inside Housing understands that landlords will have to wait until next year for details of Labour’s retooled grant funding programme for affordable housebuilding.
This is because a new AHP is unlikely to be announced before the government’s Spring Spending Review, which sets the limits of department spending for the next three years.
Sources suggested that some money might be pumped into the last year of the current AHP next month ahead of the review next year.
A cash injection to tide over the current AHP, which was set by the previous Conservative government and runs until 2026, is something housing sector bodies are calling for.
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Approvals under the current AHP have slowed since the general election was called earlier this year. This month, Peter Denton, chief executive of Homes England, explained that “four years into five” of the current programme, “we are coming towards the end of that deployment period” and “there is limited capital that remains uncommitted”.
The spring 2025 timeframe for the announcement of a new five-year AHP is expected to apply both to the England-wide programme, which is distributed to housing providers by Homes England, and the London AHP that is run by the Greater London Authority (GLA).
Tom Copley, deputy London mayor for housing and residential development, told Inside Housing at the Labour Party Conference this week that he expected to hear more about a “long-term funding settlement” for the GLA “probably in the Spring Budget”.
A new five-year AHP is expected to demonstrate support for the Labour Party’s election manifesto pledges, including a commitment to build 1.5 million homes and “prioritise the building of new social rented homes”.
Homes England’s current 2021-26 AHP was launched with a pledge to invest £11.5bn and deliver up to 180,000 affordable homes, but this target was revised down, with the government citing the rising cost of borrowing and materials. It is now expected to deliver between 110,000 and 130,000 homes.
Rachael Williamson, head of policy and external affairs at the Chartered Institute of Housing, said: “The current AHP (2021-26) is now due to result in only 26,000 homes annually.
“Even if this figure is matched by developer contributions delivering similar numbers, output will still be well short of what is required, especially as social rented homes will only form a small proportion. A new AHP must set a much more ambitious target, focused on social rented homes, with adequate funding.
“We’re calling on the government to boost the current AHP and develop a new, more ambitious programme from 2026. Providing additional funding to unlock the current AHP, while negotiating and then putting in place a new 10-year AHP from April 2026 with sufficient funding, would contribute strongly towards the government target of building 1.5 million homes in five years.”
In response, the Ministry of Housing, Communities and Local Government referred to an earlier statement by Angela Rayner.
The housing secretary said: “We know that, particularly outside London, almost all of the funding for the 2021 to 2026 programme is contractually committed. We have asked Homes England and the GLA to maximise the number of social rent homes in allocating the remaining funding.
“In London, there have been significant delays, including from changed regulations on building safety and many other pressures, which mean that even existing contracts are at risk of falling through because they are no longer deliverable under the current terms.
“We have therefore agreed with the GLA new flexibilities to the existing programme so that they can unlock delivery in London, with changes to deadlines for homes completing and tenure mix to enable some intermediate rent homes.”
Ms Rayner said the government is committed to setting out the details of future investment in social and affordable housing at the Spending Review.
She added: “We will work with mayors and local areas to consider how funding can be used in their areas and support devolution.
“The government also recognises that councils and housing associations need support to build their capacity and make a greater contribution to affordable housing supply, which is why we will set out plans at the next fiscal event to give councils and housing associations the rent stability they need to be able to borrow and invest in both new and existing homes, while also ensuring that there are appropriate protections for both existing and future social housing tenants.”
It was widely reported at the end of last month that Ms Reeves is planning to at least introduce a 10-year rent settlement for social landlords in the next Budget on 30 October.
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