May to announce £2bn for ‘strategic partnerships’ with associations at NHF conference

The funding announced by Theresa May tomorrow will fund long-term partnerships with ‘the most ambitious’ housing associations, potentially stretching through to 2028/29. It comes almost exactly a year after she announced £2bn for social rented housing at last year’s Conservative Party conference.

A detailed breakdown of the new funding has not yet been released, but it will be modelled on the long-term strategic partnerships currently being struck by large associations with Homes England.

Taking the stage at just after 10am tomorrow, Ms May will say: “You said that if you were going to take a serious role in not just managing but building the homes this country needs, you had to have the stability provided by long-term funding deals. Well, eight housing associations have already been given such deals, worth almost £600 million and paving the way for almost 15,000 new affordable homes.

“And today, I can announce that new longer-term partnerships will be opened up to the most ambitious housing associations through a ground-breaking £2 billion initiative. Under the scheme, associations will be able to apply for funding stretching as far ahead as 2028/29 – the first time any government has offered housing associations such long-term certainty.

“Doing so will give you the stability you need to get tens of thousands of affordable and social homes built where they are needed most, and make it easier for you to leverage the private finance you need to build many more.”

Long term partnerships currently involve agreeing a sum of grant funding which can be used flexibly throughout across a housing development programme stretching over several years. The tenure of the homes can be negotiated throughout the life of the programme depending on market conditions.

It contrasts to previous grant programmes, which paid grant at a fixed rate for a set number of affordable homes on particular schemes.

In July, Homes England announced strategic partnerships with EMH Group, Great Places, Home Group, Hyde, L&Q, Places for People, a joint bid between Sovereign and Liverty, and the group of five Midlands associations known as Matrix Partnership. They are expected to deliver 23,500 homes overall with 61% affordable.

Nick Walkley, chief executive of Homes England, has said he expects the deals to boost the amount of social rented housing associations can build.

The recent Social Housing Green Paper said the model would be used more widely.

Ms May will add: “Rather than simply acquiring a proportion of the properties commercial developers build, I want to see housing associations taking on and leading major developments themselves. Because creating the kind of large-scale, high-quality developments this country needs requires a special kind of leadership – leadership you are uniquely well-placed to provide.

“Given the right tools and the right support, you can act as the strategic, long-term investors in the kind of high-quality places this country needs. To put it simply, you get homes built. And I want to work with you to transform the way we do so.”

Ms May will also use the speech to urge housing associations to use their “unique status, rich history and social mission” to change the way tenants and society as a whole view social housing. She will add: “Whether it is owned and managed by local authorities, TMOs or housing associations, I want to see social housing that is so good people are proud to call it their home… Our friends and neighbours who live in social housing are not second-rate citizens.”

National Housing Federation chief executive David Orr welcomed the new money: “The really big news here is the Prime Minister’s long-term commitment to funding new affordable homes. This represents a total step change. For years, the way that money was allocated meant housing associations couldn’t be sure of long-term funding to build much-needed affordable housing.

“Now, by changing the way in which they allocate funding, ministers have given long-term confidence and confirmed that we are trusted partners in solving the housing crisis, building new homes and communities.”

Chartered Institute of Housing deputy chief executive Gavin Smart said that the announcement was a vote of confidence in social landlords. “As the Prime Minister recognises in her speech, it’s crucial that government investment helps housing associations to build the right kind of homes at the right prices. In practice this means building more homes at the lowest social rents – which is often the only truly affordable option for people on lower incomes,” he added.

Homes England chief executive Nick Walkley said:“We welcome the additional £2bn announced by the Prime Minister. This extra funding will deliver a further 40,000 affordable new homes.”

Inside Housing will be reporting from the NHF Summit in central London tomorrow.