Details of next five-year Affordable Homes Programme not expected until spring 2025

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”.

The current 2021-26 AHP distributed £7.4bn to Homes England and £4.1bn to the GLA to deliver a total of 180,000 homes. However, this target was revised down, with the government citing the rising cost of borrowing and materials.

The programmes are now expected to deliver a total of between 110,000 and 130,000 homes, of which Homes England’s proportion is between 89,000 and 106,000.

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.”

Alistair Smyth, director of policy and research at the National Housing Federation, said: “Housing associations stand ready to work with the government to meet its ambition of 1.5 million new homes over this Parliament, and the most effective way to hit that number will be to significantly increase the supply of social and affordable housing. 

“With the social housing sector facing huge financial pressures due to decades of cuts, alongside rising costs, this can only be achieved with the right support and through long-term funding to rebuild capacity that has been lost.

“Ahead of the Autumn Budget and Spending Review, we’re calling on the government to commit to a new long-term Affordable Homes Programme from 2026 for social rent and shared ownership, with funding of at least £4.6bn per year on average for the first parliament, on a minimum five-year rolling basis. As well as the certainty of future funding, an extension to the current Affordable Homes Programme, with a funding boost, a shift towards social rent, and greater flexibilities around grant rates and regeneration, is urgently needed to prevent a downturn in delivery.”

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.