Partnerships key to delivering affordable homes programme

In yesterday’s government spending review the Chancellor outlined plans to invest £39bn in affordable and social housing over the next 10 years, to help achieve the target of 1.5m new homes by 2030. 

Further commitments included £10bn for financial investments, to be delivered through Homes England, to help unlock hundreds of thousands more homes. In addition, the Chancellor announced a 10-year rent settlement at the Consumer Price Index (CPI), plus 1%. 

John Guest, Partner and Head of Social Housing at RSM UK, comments: “Yesterday’s announcement demonstrates that the government has listened to the social housing sector and acted accordingly, committing to a decade of investment despite having to make other difficult funding decisions. The £39bn outlined in affordable and social housing over the next 10 years, underpinned by a 10-year rent settlement linked to CPI +1% and proposed consultations on rent convergence gives housing associations the ability to plan with more certainty than they have for a long time. 

“Many registered providers (RPs) have been calling for a rent convergence, and the proposed changes could be the key to unlocking financial sustainability for the sector which would permit a steady income stream and support investment, but it must also ensure fairness and affordability for tenants. However, against a backdrop of squeezed margins, investment and a clear rent-setting framework will enable RPs to make long-term decisions with more confidence.” 

He added: “There’s also industry-wide sentiment that government investment will unlock additional funding from private investors, creating a multiplier effect and leading to better quality and more social and affordable homes. Partnerships between the public and private sector within the Affordable Homes Programme will therefore be key, combining expertise, resource and ambitions to tackle the housing crisis and deliver affordable and sustainable housing at scale. However, RPs are still facing high demand and funding gaps, so it’s important that banks and other financiers continue to provide support and liquidity to mobilise these development opportunities.”