en.Wedoany.com Reported - The National Housing Federation (NHF) estimates that the number of affordable homes built over the next three years could fall by 17,000, as the Homes England requires providers to resubmit their bids under the £39 billion Social and Affordable Housing Programme (SAHP).

Homes England, which manages £27 billion of SAHP funding outside London, wrote to providers last month asking them to delay parts of their expected funding schedules to reduce withdrawals in the early years. This is because the Treasury has capped annual spending in the early stages of the flagship programme.

According to a statement released by the NHF today, a survey of 13 large housing associations shows that 60% of them have lowered their development expectations for the early years under the SAHP as a result. Originally, around 70,000 homes were expected to start construction in the first three years, but this figure has now fallen by 24% to 53,000.

In a new letter to Chancellor Rachel Reeves, NHF Chief Executive Kate Henderson said that building these homes as originally planned would generate £3 billion in economic growth and support 5,500 jobs.

Henderson, in the letter also co-signed by the chief executives of seven development providers, pointed out that the government should front-load more SAHP funding to the early stages of the programme to unlock the capacity created by policy changes and translate it into starts on site. This approach makes broader economic sense; during a downturn in the housing market, grant-funded social housing construction will provide strong counter-cyclical support for the construction industry and the overall economy, without crowding out private investment.

Homes England has now stated that grants will be paid when construction starts on site, rather than when land acquisition costs are first incurred, as providers initially assumed. This means providers will have to borrow to bridge the funding gap. The chief executive of one large housing association told Inside Housing that, compared to estimates based on payment at the time of land acquisition, this will add over £120 million in interest costs for their organisation over the ten-year programme.

In an interview with Inside Housing last month, Homes England Chief Executive Aimee Rees said that the Treasury releases funding for each government project in tranches, and the £27 billion under management is not all available in the first year, so it is necessary to ensure that ambitions align with deliverable funding allocations.

The Greater London Authority, which manages £11.7 billion in SAHP funding for the capital, has written to bidders asking them to reconsider their bids due to severe "over-bidding."

A spokesperson for Homes England said that delivery is not being slowed down, and the focus is on acceleration. The SAHP is designed to create a strong pipeline of homes that aligns with the government's ambitions, and they continue to see bold and ambitious proposals from partners across the country. The total funding for the programme and its allocation are set by the government, and they are working closely with partners to align delivery with this framework.

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