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A Guide to the Affordable Homes Programme 2021-2026

Blog17 June 2021

The Affordable Homes Programme 2021-2026 is a government initiative to boost the construction of affordable new build homes in England. With house prices continuing to rise in the UK, increasing numbers of potential buyers are finding it difficult to get on the housing ladder.

The aim of the Affordable Homes Programme is to see 130,000 new properties built by 2026, helping meet targets like increasing levels of home ownership and reducing homelessness. With more than £7billion set aside to reach this goal, there’s a lot of work to do.

So what is affordable housing? In this blog we’ll define what it means, discuss who can apply for funding, and answer questions about heating new build and social housing properties.  

What is the Affordable Homes Programme?

The Affordable Homes Programme is a scheme that provides grant funding to contribute towards the cost of building affordable housing. Over £7.39 billion of funding has been made available through Homes England from April 2021 to help pay for the construction of up to 130,000 new homes outside of London by March 2026. 

For developers looking to build affordable housing in the capital, £4 billion has been set aside by the government under the Homes for Londoners: Affordable Homes Programme 2021-2026, with a wide array of information on funding guidance available.

Who Qualifies for the Affordable Homes Programme?

The Government defines ‘affordable housing’ as “housing for sale or rent for those whose needs are not met by the market”. With house prices on the rise and no sign of them slowing down soon, the aim is to build new houses that can act as cheaper rental or sale properties, offering more affordable routes to home ownership.

Who Can Apply for Funding to Build Affordable Housing?

Housing associations are currently building the majority of affordable housing, but local authorities, developers, for-profit providers and community-led organisations can also apply for this government funding.

To receive grant funding, developers must be qualified investment partners of Homes England or working with an organisation that is. 

To gain access funding for the programme, there are two possible routes:

  • On a scheme-by-scheme basis, bidding through a Continuous Market Engagement (CME) process.

  • Through ongoing Strategic Partnerships, granting access to funds for longer-term development programmes.

Continuous Market Engagement (CME)

Grants can be applied for through Continuous Market Engagement across the duration of the 2021-2026 programme to fund individual schemes. Developments that are funded through CME must have begun on site by 30 September 2025 and be completed by 31 March 2026.

For the CME process, developers do not need to be an investment partner to apply, but must have gained this status before grant payments can be received.

Strategic Partnerships

Launched in 2018, strategic partnerships were designed to provide housing associations with more flexibility around grant funding and access to wider expertise across the agency. Applications for the current round of strategic partnerships had a deadline submission of 18 May 2021.

As of April 2021, Homes England had signed partnerships with 27 housing associations to deliver more than 40,000 affordable homes, providing over £1.8bn of affordable housing grant investment. 

Is Affordable Housing the Same as Social Housing?

While social rented homes are the most common types of affordable housing according to Shelter, these two terms are not interchangeable. Social housing refers to a scheme in place for over 100 years to provide stable, low-rent housing for people in Britain, while affordable housing properties are available both for rent and for sale.

Is Affordable Housing for Rental or Purchase Homes?

The affordable housing scheme is available to homes that will be made available for both rent and purchase. This opens up a wide range of possibilities, including social rent, shared ownership and Rent to Buy. 

Affordable housing can include: 

  • Social Rent homes, which are available for rent through registered providers for rent at a cost below market price in the local area.

  • Affordable Rent properties, where rental prices are set at up to 80% of rental costs for a similar home in the local area.

  • Rent to Buy, where homes are available to rent at a reduced cost to allow tenants to save a deposit for their first home.

  • Shared ownership properties, where people buy a share of a home then pay rent on the remaining share.

Heating Solutions for Affordable Home Developments

Thanks to our broad experience working with developers in both the new build and social housing sectors, Ideal Heating are perfectly placed to help tackle the challenges of providing efficient and reliable central heating solutions for affordable housing. 

Our design service can provide a full development plan to match your requirements, while our Ideal Package combines everything you need to meet Building Regulation Part L Compliance. From combi boilers and radiators to our forthcoming range of heat pumps, Ideal Heating can help keep the residents of your affordable home development warm and comfortable all year round.  

You can find further advice on gas safety, servicing and boiler care in our FAQs, as well as more in-depth guides on the Ideal Heating blog.