Housing associations will be able to use affordable homes funding to replace old, low-quality housing under a major shakeup of grant funding rules.
Until now, funding provided though the government’s Affordable Homes Programme could only be spent on the delivery of new affordable homes – a restriction many in the sector argued stymied the regeneration of social housing.
The change means Homes England can now support partners to replace housing that is outdated and no longer fit for purpose with a larger number of high-quality, energy-efficient new affordable homes, the government said.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 am announcing today will unlock more affordable housing by ensuring we replace old homes with ones that are fit for the future,” she said.
“This is absolutely critical in helping us regenerate communities, speed up housing delivery and provide high-quality homes for more families.”
The change will come into effect immediately, with funding decisions made on a regular basis until the end of March 2025, subject to availability of funding. A government statement said the change would “turbo-boost” estate 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, increasing financial pressures have made achieving that balance even more difficult to manage,” he 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.
“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.”
The National Housing Federation (NHF) welcomed the move, saying it had argued for years that grant funding rules should be amended 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 plan for housing.”