Housing associations will be able to use affordable housing finance to replace old, low-quality homes under a major overhaul of grant funding rules.
Until now, funding provided by the government’s affordable housing program could only be spent on the delivery of new affordable homes, a restriction which many in the sector argued was preventing the regeneration of social housing.
The change means that Homes England can now support partners to replace outdated and no-longer-fit-for-purpose homes with a greater number of high-quality, energy-efficient affordable homes, the government said.
Housing Minister Rachel Maclean said improving the quality and supply of social housing was critical to building the affordable housing needed across the country.
“The changes I’m announcing today will unlock more affordable homes, ensuring we replace old homes with ones that are fit for the future,” he said.
“This is absolutely critical to helping us regenerate communities, speed up housing delivery and provide high-quality homes for more families.”
The change will take effect immediately, and funding decisions will be made on a regular basis until the end of March 2025, subject to the availability of funding. A government statement said the change would “boost” the estate’s regeneration.
Homes England chief executive Peter Denton said the affordable housing sector had struggled to balance investment in existing homes with the competing priority of building new homes.
“Over the past year, mounting financial pressures have made achieving this balance even more difficult to manage,” he said. “This change is something the sector has been asking for, and with it comes a real opportunity to accelerate the regeneration of social housing and help level the playing field for communities across the country.
“We will work quickly to make this funding available to ensure partners can get the most out of this change and are ready to use all the tools, capabilities and capabilities we have available to support delivery.”
The National Housing Federation (NHF) welcomed the move, saying it had argued for years that grant funding rules should be changed to allow housing associations to replace existing homes.
“For too long housing associations have simply not had access to the funding needed to replace social homes that are no longer fit for purpose,” said NHF Chief Executive Kate Henderson.
“Our sector is absolutely committed to improving the quality of our homes and this announcement will enable us to work in partnership with the government to do this vital work.
“Ultimately, we believe that regeneration, as well as the delivery of much-needed new social housing, should be central to a long-term national housing plan.”
