Government funding for affordable homes can now be used to fund estate regeneration plans, with money allocated to replace existing but outdated properties.
Housing minister Rachel Maclean said: “The changes I am announcing today 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.”
Homes England chief executive Peter Denton said: “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.”
The policy change comes as Homes England said it was on track to exceed its 130,000 affordable homes target after a bumper year of new starts.
However, it is only on track after it was granted a series of extensions to its programmes to take into account the impact of the Covid pandemic and market uncertainty.
The government’s regeneration arm started 36,478 homes on-site in the year to 31 March, and completed 32,990 homes.
The agency said 126,800 homes had been started by the end of March 2023, with a further 5,000 remaining starts to deliver in 2023-24.
The proportion of affordable homes started on site was up on the previous year, as a result of the maturing of its Affordable Homes Programme for 2021-26.
This is despite overall housebuilding starts being depressed nationally due to the cost of living crisis, higher interest rates and rising costs.
The programme was intended to have finished in 2021, but was extended to March 2023 in the wake of the Covid pandemic. A subsequent extension was granted in 2022 to 2024 to safeguard the sector against turbulent market conditions.
From 1 April 2022 to 31 March 2023, 78% of starts were for affordable homes, a total of 28,457 homes. This is an increase of 3% on the previous year.
Of the housing completions, 71%, or 23,318 homes, were affordable, a 12% decrease on the previous year. Homes England attributed the fall to the closure of the previous affordable homes programme, and the fact that the latest one, AHP 2021-26, is only in its second year.
Denton said: “The success of the Shared Ownership and Affordable Housing Programme 2016-21 is testament to the drive, ambition and resilience of our delivery partners to build their pipelines in the face of unprecedented barriers, and create over 130,000 new, quality affordable homes for families across the country.”
But he acknowledged that there were “challenges”.
“Affordable housing providers experienced a perfect storm of build cost inflation, rising labour costs, material availability, building remediation issues and the duty to support tenants through a cost-of-living crisis, all of which hindered investment in new homes, leading to stalled or stopped schemes.”
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