Homes England has announced that grant funding provided through the government’s Affordable Homes Programme 2021-26 can now be used to fund replacement homes, alongside new affordable homes, as part of wider estate regeneration plans.

This means that the housing and regeneration agency can better support its partners to replace housing that is outdated and no longer fit-for-purpose, with a larger number of high-quality, energy efficient new affordable homes.

Housing Minister Rachel Maclean said: “We remain committed to building the affordable homes this country needs and a key part of this is improving the quality and supply of social housing.

“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. This is absolutely critical in helping us regenerate communities, speed up housing delivery and provide high-quality homes for more families.

“I’ll continue to work with Homes England and developers to get delivering through this scheme as quickly as possible.”

This change to the Affordable Homes Programme has been agreed with the Department for Levelling Up, Housing and Communities, and is part of the Agency’s wider efforts to help bolster the affordable housing sector and maintain housing supply.

It also aligns with the agency’s five-year strategic plan, published in May, which clarifies its mandate to drive regeneration and housing delivery to create high quality homes and thriving places across England.

Grant funding for estate regeneration is available to partners looking to replace existing homes with new affordable homes and build additional new affordable homes. Grant funding from the Affordable Homes Programme is also still available to those looking to only build new affordable homes. Providers can apply through Homes England’s continuous market engagement route, while existing Strategic Partners will be able to use grant already allocated to them.

The change will come into effect immediately and funding decisions will be made on a regular basis up until the end of March 2025, subject to availability of funding. Homes England is keen to see proposals that can deliver at pace, maximise the number of new affordable homes, and enhance wider efforts to level up and regenerate communities. All schemes must start on site by 31 March 2025 and will need to complete within the Affordable Homes Programme’s current timeframes.

Peter Denton, Chief Executive of Homes England, commented: “The affordable housing sector has always had to balance the investment it makes in existing homes with the investment in makes in building new homes. Over the past year, increasing financial pressures have made achieving that balance even more difficult to manage.

“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. We encourage all affordable housing providers and local authorities to come and talk to us as early as possible if they need support to develop their proposals – we’re here to help.”