The government has announced a £300 million boost to the Affordable Homes Programme (AHP), promising up to 2,800 additional homes, with half allocated for social rent. Additionally, a £50 million increase to the Local Authority Housing Fund (LAHF) is expected to deliver over 250 more council homes.
While any investment in affordable housing is welcome, the scale of the housing crisis demands a more ambitious and sustained approach. With over 1.2 million households on social housing waiting lists and growing pressure on local authorities, the sector requires long-term solutions that go beyond one-off funding injections.
The Importance of Social Rent and Affordable Housing Options
The commitment to at least 1,400 homes for social rent is a step forward, as social housing provides long-term affordability and security for those most in need. However, demand far outstrips supply. According to Shelter, England needs at least 90,000 new social rent homes per year to meet demand, yet recent delivery has fallen well short of this target. The latest funding allocation, while helpful, represents only a small fraction of what is needed to address the housing shortage.
To truly expand affordable housing, the sector must explore a diverse range of tenures, including Shared Ownership, Discount Market Sales, and Custom Build Housing. Expanding support for Custom Build Housing, where homes are tailored to individual needs while remaining affordable, could provide greater homeownership opportunities while ensuring long-term affordability.
Local Authorities Need More Support
The £50 million boost to the Local Authority Housing Fund will allow councils to deliver over 250 additional homes, helping to relieve some pressure on housing lists. However, local authorities continue to face financial constraints, limiting their ability to build at scale. A shift towards long-term funding models, simplified grant mechanisms, and greater flexibility in housing delivery would better empower councils to meet housing needs in their communities.
Unlocking Institutional Investment and Alternative Delivery Models
To bridge the affordable housing gap, collaboration between the public and private sectors is essential. For-Profit Registered Providers (FPRPs), housing associations, and local authorities can work together to leverage institutional investment, maximise land use, and deliver homes at scale. By encouraging innovative delivery models, such as Shared Ownership, Custom Build Housing, and Community-Led Housing, the government can expand affordable housing options while maintaining long-term affordability.
Custom Build Housing: An Underutilised Opportunity
Custom Build Housing is an underutilised but scalable model that could support the affordable housing sector by providing lower-cost, energy-efficient homes tailored to the needs of residents. Encouraging more Custom Build developments within the Affordable Homes Programme could:
- Empower local communities to design and develop housing that meets their needs.
- Reduce development costs by allowing buyers to have greater input into their homes.
- Increase housing supply without increasing public borrowing.
By integrating Custom Build Housing into government housing strategy, more affordable homes can be delivered at pace while providing buyers with greater choice and flexibility.
A Long-Term Commitment Is Needed
While the £350 million funding boost signals government recognition of the crisis, the sector needs a sustained and strategic approach. This includes:
- Multi-year funding settlements to provide stability for housing providers.
- Planning system reform to speed up development.
- Greater incentives for affordable housing investment, including support for Modern Methods of Construction (MMC) and Custom Build Housing.
- Stronger commitments to social housing to prevent homelessness and improve long-term affordability.
At Highlight Housing, we welcome this funding as a positive step, but urge the government to go further. Ensuring affordable housing delivery is prioritised, supported, and scaled up is essential to tackling the housing crisis and providing long-term security for those in need.
Let’s Work Together to Deliver More Affordable Homes
The housing sector must continue to collaborate, innovate, and advocate for policies that enable sustainable, large-scale affordable housing delivery. If you are a housing association, local authority, or developer, we’d love to discuss how Highlight Housing can support your affordable housing sales, Shared Ownership, and Custom Build Housing solutions.