Major change announced for estate regeneration with affordable homes funding

Yesterday Homes England announced that grant funding provided through the government’s Affordable Homes Programme can now be used to fund replacement homes, alongside new affordable homes, as part of wider estate regeneration plans.  

As the cost-of-living continues to bite, local authorities across the UK are attempting to target vacant homes or holiday lets in an attempt to convert them into affordable housing for people strugglingly financially.

However, yesterday, the government made an announcement which helps the housing and regeneration agency better support its partners to replace housing that is outdated and no longer fit-for-purpose, with a larger number of high-quality, energy efficient new affordable homes.

Housing Minister, Rachel Maclean, said: ‘We remain committed to building the affordable homes this country needs and a key part of this is improving the quality and supply of social housing.

‘The changes I [announced yesterday] will unlock more affordable housing by ensuring we replace old homes with ones that are fit for the future.

‘This is absolutely critical in helping us regenerate communities, speed up housing delivery and provide high-quality homes for more families.

‘I’ll continue to work with Homes England and developers to get delivering through this scheme as quickly as possible.’

Commenting on the announcement, which was agreed with the Department for Levelling Up, Housing and Communities, Peter Denton, chief executive of Homes England, said: ‘The affordable housing sector has always had to balance the investment it makes in existing homes with the investment in makes in building new homes. 

‘Over the past year, increasing financial pressures have made achieving that balance even more difficult to manage.

‘This change is something the sector has been calling for, and with it there is a real opportunity to accelerate the regeneration of social housing and help level up communities across the country.’

‘We’ll be working quickly to make this funding available to ensure partners can get the maximum benefit from this change, and are ready to use all of the tools, capacity and capability we have available to us to support delivery,’ Peter said. ‘We encourage all affordable housing providers and local authorities to come and talk to us as early as possible if they need support to develop their proposals – we’re here to help.’

Despite the news only becoming known yesterday, officials have remarked that the change will come into effect immediately and funding decisions will be made on a regular basis up until the end of March 2025, subject to availability of funding.

Alongside this, Homes England have outlined that all schemes must start on site by 31^st March 2025 and will need to be complete within the Affordable Homes Programme’s current timeframes.

Image: Alexander Grey