Jenrick reveals details of new £12bn Affordable Homes Programme

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The housing secretary Robert Jenrick has announced more details of the government’s new £12 billion Affordable Homes Programme (AHP) as the prospectus for the fund is set to be launched by Homes England later this week.

Councils, housing associations, and private providers have been invited to start preparing their bids for the new £11.5 billion AHP, which will run for five years between 2021 to 2026. £700 million has also been made available from the current AHP, which has been extended to 2023.

The new AHP, confirmed in March’s Budget, aims to provide up to 180,000 new homes across the country. Nearly £7.5 billion will be delivered outside London by Homes England – over £2 billion more than the amount given under the previous AHP.

Around half of the new homes, which will be delivered starting from next year, will be available for affordable home ownership. The rest will be made available for affordable and social rent including 10% for supported housing.

Announcing the launch of the prospectus, Jenrick said: “Today’s announcement represents the highest single funding commitment to affordable housing in a decade and is part of our comprehensive plans to build back better.

“This government is helping hard-working families and prospective first-time buyers get their feet on the housing ladder in an affordable way.

“Thanks to the range of flexible ownership options being made available, more families across the country will be able to realise their dreams of owning their own home, with half of these homes being made available for ownership.”

In addition to launching the new AHP, Jenrick has also announced a new shared ownership model aimed at helping more people get onto the property ladder.

The new shared ownership model will reduce the minimum initial share people can buy in a property from 25% to 10%, allowing people to buy additional shares in their home in 1% instalments with ‘heavily reduced’ fees.

The new model, which will be available on the vast majority of rented homes delivered through the new AHP, also introduces a 10-year period for new shared owners where the cost of repairs and maintenance on their homes will be covered by landlords.

Nick Walkley, chief executive of Homes England, said: ”We welcome the launch of the new Affordable Homes fund, which gives Homes England a unique opportunity to work on behalf of the government to accelerate the delivery of high-quality, affordable homes.

“This government is helping hard-working families and prospective first-time buyers get their feet on the housing ladder in an affordable way.

“Despite the challenges of COVID-19, this long-term funding settlement gives our partners the confidence they need to invest in new homes and the communities they work for.”

Kate Henderson, chief executive of the National Housing Federation, welcomed that the new AHP will include money for social rented homes – the most affordable type of homes as they are typically around 50% of market rent.

She said it was ‘particularly positive’ that the new AHP will put affordable and social rent on an equal footing to affordable ownership, and also praised the announced funding for supported housing.

However, Henderson said there are ‘questions and risks’ about the new proposed shared ownership model, saying it ‘may make it harder for housing associations to build in the current climate’.

“What we need from government to shore up investment is certainty and confidence, and some of the proposals for shared ownership and the introduction of the Right to Shared Ownership may have the opposite effect,” Henderson said.

Tracy Harrison, chief executive of the Northern Housing Consortium (NHC), stressed the importance of the AHP to the North of England as the only major housing funding stream that is not currently geographically targeted.

She too welcomed Jenrick’s announcement, saying the NHC will await the details of the prospectus but it was ‘encouraging’ to see the share of the programme open to bidders outside London.

“The North has accounted for one in three of the Homes England affordable housing completions in previous programmes – we would hope and expect that the new programme will deliver at least the same proportion in the North,” Harrison commented.

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