Home Sweet Affordable Home: MHCLG launches 2026 Affordable Homes Programme with some surprises

At the end of last week, MHCLG launched its Social and Affordable Homes Programme for 2026-2036, and it makes for a very interesting read.

Now, given that I am a planning solicitor, and not a social housing specialist, this blog is going to take a fairly planning-centric look at the policy paper setting out the detail of the new programme. There is, however, plenty in there for us to get our teeth into.

Additionality and s.106 Affordable Housing

First things first, there is no indication that the government is proposing to change the rules around additionality for this programme to allow grant funding to be used to purchase s.106 Affordable Housing. That particular change is currently only being considered for London, as part of the ’emergency measures’ to boost house-building in the capital, which are due to be consulted on later this month. There is the vaguest of hints that it may also be allowed in New Towns (see below), but that does require reading between the lines a fair bit.

The policy paper does have a lot to say about the challenges in the s.106 Affordable Housing Market, though. After stating that MHCLG “expect[s] providers to increase delivery of S106” the paper then goes on to dedicate four entire paragraphs to the topic. The most interesting of which are set out below, for completeness:

“The build-up of unsold and uncontracted S106 homes is the result of a complex interplay between a range of factors. These include RPs constrained financial capacity; concerns among RPs that some S106 homes do not meet the quality and other standards required; RPs deciding to prioritise other routes to development; and RPs and developers being unable to agree on S106 unit pricing.

Alongside efforts to further refine our evidence base, ongoing work is taking place on a holistic policy package that will deal with the legacy problem of existing uncontracted section 106 units and also prevent the problem recurring. We will confirm further details in due course.”

Given the problems that the lack of demand for s.106 Affordable Housing is causing for housing developments around the country, these further details cannot come soon enough…. although some might think that if temporary access to grant funding for s.106 units is part of the solution for London, then it might be worth considering in other parts of the country as well.

Mayors on the march

The new programme also places a much greater emphasis on the roles of regional mayors in delivering affordable housing than previously.

The mayors in Established Mayoral Strategic Authorities (Greater Manchester, the Liverpool City Region, the North East, South Yorkshire, West Yorkshire and the West Midlands) will be tasked with setting the strategic direction for affordable housing delivery in their areas, and will be given a much greater role than previously in the decision making process for grant-funding.

To quote the policy paper for a moment:

“EMSAs will have greater visibility of the pipeline of bids for funding in their area, enabling closer collaboration with Homes England and providers on key sites, priorities and co-investment opportunities. EMSAs will provide feedback on the alignment of bids for Strategic Partnerships to their published priorities and will input into the decision-making process for the most complex CME bids, and those that relate to published priority growth areas. Homes England will continue to be responsible for taking final funding and contractual decisions in line with the core strategic objective to maximise supply. This is an interim step as, over time, we seek to move towards full devolution of funds and delivery for affordable housing.”

The roles of the Mayors was emphasised in a press release from the Secretary of State that was issued earlier the same day.

New towns, council housing & more diverse delivery

Other noteworthy elements of the new affordable homes programme include:

• A re-emphasis of the New Town Taskforce’s recommendation that New Towns deliver at least 40% affordable housing, comprising fifty per cent social rent, alongside confirmation that partners delivering in New Town locations would be eligible to bid for funds from the Social and Affordable Housing programme. This could be read as an indication that grant funding will be made available for s.106 secured affordable housing in these new settlements (as that would be the usual way of securing a policy compliant mix) but that has not been explicitly stated in the policy paper itself.
• A greater emphasis on encouraging councils to build their own affordable housing stock, including by allowing councils to combine Right to Buy receipts with grant funding from the Social and Affordable Homes Programme.
• A greater focus on delivering supported housing through the Affordable Homes Programme,  including older people’s housing, specialist housing for those with complex needs, and transitional housing for the homeless.
• A desire to increase the number of affordable housing developments brought forward by community land trusts and housing co-operatives.

Right to Shared Ownership

Finally, and most interestingly, the new affordable housing programme comes with a twist. The Right to Shared Ownership – which had been introduced as part of the last Affordable Homes Programme – will NOT apply to rented housing developed under the new scheme.

This announcement was not part of the policy paper itself, but was rather confirmed in updated policy guidance on the Right to Shared Ownership, which now contains the following statement:

“The Right to Shared Ownership does not apply to rented homes funded by the Social and Affordable Homes Programme 2026 to 2036 but it does apply to most rented homes funded by the Affordable Homes Programme 2021 to 2026”

This appears to be the latest in a series of steps by the Labour Government designed to stop affordable housing stock being sold off faster than it can be replaced – which began with the significant reduction in Right to Buy discounts that was announced in year’s budget. It will be interesting to see if there are any further moves in this direction in the next budget, which is now only a few weeks away.

In fact, given the budget is so close now, and that planning, development and the housing crisis have been so closely tied to Labour’s political and economic fortunes, I would not be surprised if we get some more announcements in the coming days and weeks…..

Guess I better stock up on the coffee then.