Tuesday's announcement to extend the current Affordable House Programme (AHP) by an additional £2bn must be welcome news to the sector. Prior to the announcement, a combination of the current AHP coming to an end, registered providers (RPs) having already fulfilled their allocated units, a long lead time until the June spending review and the length of time post June for funds to be available (likely March/April 2026), meant that new development schemes were stalling.

Some schemes that were already underway and Homes England grant dependent were progressing slowly, but conditional on confirmation of grants with extended long stop dates. Some have come to a complete stop. SME developers have been struggling with this deal structure as they are unable to forward fund early development costs without the backing of the RP; with RPs unable to give any certainty without news of the next AHP.

Over the last few months new development schemes coming forward to us have, mostly been s106 Agreement units, but with the draw on funds of RPs being asset lead, not all RPs are in a position to be able to progress with s106 unit acquisitions; and SMEs were unable to bring package deals forward.

It will no doubt take some time for the additional £2bn to filter down, but what is crucial is that the funding is being allocated under the current AHP, and so RPs do not need to wait for the new AHP grant agreements to be in place, which would have effectively seen a gap in development funding of 12 months.

With predictions now being stated of 1.3m new homes being built in 2025/26 alone, we're hoping those stalled schemes can now progress.

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For more information on the Affordable Homes Programme, please contact me.