The latest cabinet reshuffle which included Lee Rowley returning as Housing Minister, had some surprising outcomes, but despite a new team sheet, one thing you can be sure of is that current housing fundamentals won't change – more affordable housing supply is needed and needed fast.
Homes England's Affordable Homes Programme 2021-2026 is now passed its halfway point and the agency is looking to take advantage of new opportunities in the market. For those who may not have spotted it, Homes England November 2023 Update invites partners to submit proposals for affordable housing grant funding under the programme. Homes England are seeking to support proposals of a minimum 500 additional homes with starts by 31 March 2025 and completion by 31 March 2026. Clearly, the focus is on accelerating pipelines. This update also follows the recent expansion of products funded under the programme to include additional homes in regeneration projects (see our article on grant funding for regeneration here).
There is no doubt: funding is available, and government want to spend it. The market seems to have shifted up a gear following a further decision by the Bank of England to hold the base rate and hopefully there will be more cautious optimism following another drop in inflation, but it may take a few more months for the dust to settle, drive confidence and in turn accelerate delivery. Changes in attitude take time but the direction of travel is more positive than where we were this time last year. It is only to be hoped that whichever party comes out on top of Spring's anticipated General Election, will put housing on its agenda.
With open market sale stalling on some sites, developers may consider additional affordable housing sales to registered providers more appealing, providing them with immediate cash and disposing of burdensome vacant units. The possibility of additional grant is unlikely to sway registered providers to acquire poor quality stock – lessons were learnt in the 2008-2009 downturn about hoovering up poor quality homes. However, the sector generally has seen a drive to improve build quality.
In addition, the increasing popularity of risk sharing (particular in current times) through joint venture arrangements has brought more registered providers into partnership with developers. Such partnerships provide confidence of delivery and acquisition of the section 106 affordable by the registered provider partner, but also tends to drive up the number of additional affordable units delivered on these sites.
There are glimmers of opportunities that can been seen in the sector to deliver more affordable housing. The key for Homes England though is delivery by March 2026. Homes England is there to support such emerging opportunities – that message is clear.
