Guidance

Social and Affordable Homes Programme 2026-2036: MHCLG policy statement to accompany guidance to bidders from Homes England and the Greater London Authority

Published 7 November 2025

Applies to England

Ministerial foreword

The task of bringing England’s acute and entrenched housing crisis to an end requires us to grapple decisively with its fundamental causes. Chief among them is a chronic shortage of affordable, and in particular social rented, homes. That is why the government committed itself to delivering the biggest increase in social and affordable housebuilding in a generation.

Our new Social and Affordable Homes Programme is integral to achieving that objective. It will give Registered Providers a decade of certainty over the capital funding they will have available to build new, more ambitious housing development projects, and could deliver around 300,000 affordable homes over its lifetime, with around 180,000 for Social Rent.

It therefore gives me great pleasure to launch the full details of the programme as part of our plan to kickstart a decade of social and affordable housing renewal. The details published today confirm that we have retained the best parts of previous programmes, while incorporating new design elements to maximise delivery; allow regional leaders to shape and guide delivery in their areas; and ensure providers deliver the types of homes the country needs.

As per the commitments we set out in the English Devolution White Paper, we have worked closely with Established Mayoral Strategic Authorities (EMSAs) in the design of the new programme. The priorities that each EMSA has identified to guide bids in their areas are being published today alongside upfront indicative spend for each, subject to suitable projects.

We are also today confirming a number of programme details that providers have told us will be key to effective delivery – these include an updated approach to enable more estate regeneration; flexibility on grant rates to enable delivery of homes that are more expensive to build; and a new portfolio approach to bidding that will support smaller providers to deliver a greater range and diversity of housing – including vital supported housing units for which there is a desperate need across the country.

We will also make available £2.5 billion of low-interest loans to support the delivery of new social and affordable housing. These will be open to private registered providers, and a substantial allocation of the loans will be targeted at London in light of the acute challenges facing PRPs in the capital.

I am also pleased today to confirm a number of additional measures to support delivery of the Social and Affordable Homes Programme, particularly by councils as part of our commitment to reinvigorating council housebuilding. We have allocated £5.5 million in new funding through our Council Housebuilding Support Fund to help councils develop bids to the SAHP; have removed barriers that prevented new council housebuilders from expanding their stock; and are enabling the combination of different income streams into new housing investments.

In the coming months, we will provide Registered Providers (both private registered providers and councils) with the remaining information they need to finalise their business and future supply plans – including how we will implement rent convergence at Autumn Budget; and our response to recent consultations on a modernised Decent Homes Standard and Minimum Energy Efficiency Standards.

Ending England’s housing crisis will be a painstaking and laborious effort that will require focus, energy, and determination over many years. We are acutely aware that it cannot be accomplished by central government alone, which is why we have prioritised working in close partnership with the sector.

The package announced today should act as a starting gun for it. The government has backed Registered Providers with the biggest social and affordable housing investment in recent memory. We have listened carefully to what they have told us they need to deliver.

We are now calling on all Registered Providers to review the details confirmed today and to start preparing large and ambitious proposals ready for when bidding opens in February, so that together we can make tangible progress toward a country where everyone enjoys a decent, safe, secure, and affordable home in which to live.

Matthew Pennycook MP
Minister of State for Housing and Planning

Overview

The government’s 5-step plan, ‘Delivering a decade of renewal for social and affordable housing’ published on 2 July 2025, set out the key priorities and policy choices for the new Social and Affordable Homes Programme. This document now sets out the final detail of the programme’s policy and our progress against these 5 steps. It is also accompanied by the detailed guidance for prospective bidders published by Homes England (HE) for bids outside of London and the Greater London Authority (GLA) for bids in London. We plan to open for bids in February 2026.

The new 2026 to 2036 Social and Affordable Homes Programme is intended to combine the best elements of previous programmes with new design elements to maximise delivery and meet the 1.5 million homes target, and ensure it enables providers to build the types of homes the country needs. The core strategic objective of this new programme will be to maximise supply – particularly of Social Rent homes, with a target to deliver at least 60% of the homes under the programme as Social Rent, with the remainder available for other tenures including Shared Ownership and Affordable Rent (and Intermediate Rent in London). This ensures we are prioritising delivery of the most affordable homes to help hard working families and lift children out of poverty and homelessness.

While we have removed specific targets for any other types of homes, we recognise that some types of homes – such as council homes, supported housing, rural and community-led homes – can sometimes cost more to deliver, and grant rates for individual bids can reflect that. While the new programme will focus on new supply, it will also continue to support some regeneration schemes that provide a net increase in homes overall.

How the new programme will be delivered

The Social and Affordable Homes Programme is intended to be a national programme to ensure a strategic approach to meeting housing need, and bring together many of the steps noted in the 5-step plan. It will be delivered through 2 delivery partners:

• Homes England: responsible for delivery outside London
• Greater London Authority: leads delivery within London, under powers of the Localism Act 2011

Each body is publishing a Prospectus setting out eligibility, priorities, and bidding processes. Bidding for the new programme is expected to open in February 2026, with further details available from Homes England and the Greater London Authority.

Bidding can happen through 2 routes (agency-specific bidding guidance can be found in the prospectuses):

• Strategic Partnerships (SP) can offer long-term, multi-year funding agreements with some larger providers to support scale, innovation, and delivery of a pipeline of affordable homes, with enhanced reporting and alignment to national priorities.
• Continuous Market Engagement (CME) is a rolling, flexible route for providers to bid for funding on a scheme-by-scheme basis, assessed on value for money, deliverability, and local need - ideal for smaller or one-off developments. Following engagement with the sector, we have also implemented a new CME ‘portfolio’ approach, which contains some features of Strategic Partnership working by enabling smaller portfolios of schemes through the CME route.

Homes England and the Greater London Authority’s Capital Funding Guides (CFG) are the definitive source of rules and procedures for all providers receiving Social and Affordable Homes Programme funding. All providers must comply with the CFG as a condition of funding, and all allocations are subject to qualification and contract. It ensures consistency, transparency, and accountability across the programme. Updates to the CFGs to reflect the new programme will follow.

Ensuring SAHP is accessible to all providers

While maximising supply is at the forefront of the programme, the programme is also designed to support greater diversity and supply of the different types of homes that can be delivered, as well as greater diversity in who delivers these homes.

We recognise that some types of social and affordable homes that are much needed can often cost more to deliver – such as some homes built by local councils, supported housing, community-led and rural homes. The new programme is designed to be flexible to support the greater diversity of supply needed, and we are asking providers to come forward with ambitious bids that reflect this diversity. This approach replaces the previous approach of setting numerical targets for particular types of homes (e.g. for rural and supported housing delivery, and the use of Modern Methods of Construction). We will maintain the principle that all bids will be assessed for value for money based on their particular circumstances, and we will not pay any more grant than is necessary to meet the gap between the costs of building and the funds that can be raised by providers. This is why we are not publishing standard grant rates, except in the case of the time limited planning fast track route in London announced on 23 October 2025.

Separately, we welcome bids where the use of Modern Methods of Construction is able to support delivery of the programme’s objectives, including speed of delivery and diversification of the market. We will continue to support innovation in affordable housing delivery whilst delivering the quality homes that we need at pace.

A) Increasing participation of councils and delivery of council housing

As set out in our 5-step plan for ‘Delivering a decade of renewal for social and affordable housing’, we are committed to reinvigorating council housebuilding such that councils can once again build at scale, and we have designed the Social and Affordable Homes Programme in a way that reflects this ambition.

To encourage greater participation by councils (and other providers), the Programme will take a flexible approach to supporting a greater diversity of supply with the option to smooth value for money assessments across a portfolio; we are encouraging councils and other specialist providers to come forward with ambitious bids that reflect this need.

In Homes England’s case, the new Continuous Market Engagement ‘portfolio’ route will help councils by enabling them to bid for grant at an earlier stage in the pre-development process than has previously been the case and across several sites at once, thereby lowering pre-development risk and encouraging larger, more ambitious development pipelines. The GLA will strongly be encouraging councils to bid through the initial bidding window.

In addition to these new design features, we have also maintained specific elements of previous programmes that we know are important to councils. This is why the Social and Affordable Homes Programme will continue to support regeneration, but in a slightly different way to the previous programme, as set out in more detail below. The programme will also permit a limited number of acquisitions. These retained features will be of particular use to councils with older housing that is reaching the end of its life and those who need to quickly increase their stock holdings in response to specific local pressures, including high levels of homelessness and temporary accommodation usage.

From 2026 to 2027, councils will be able to combine Right to Buy receipts with grant from the Social and Affordable Homes Programme. Acting on longstanding calls from councils, this will strengthen their ability to cross-subsidise delivery through the Programme. No limit will be placed on the level of Right to Buy receipts that can be used and the option to mix receipts with grant will increase the viability of councils’ bids, ensuring that we can build as many homes as possible.

We have already begun working to facilitate greater council engagement with the Social and Affordable Homes Programme. We have awarded £5.5 million in grant funding to 29 councils who made successful bids to the Council Housebuilding Support Fund, to develop larger and more rapid bids to the programme. The Fund forms part of the Department’s Council Housebuilding Skills and Capacity Programme, which is backed by £14 million in 2025-26, and has been designed to strengthen the capability of councils to increase their current rates of housing delivery.

B) Increase delivery of supported housing

We want to see new supply of supported housing in England through the new programme, in greater numbers and also across a diverse range of cohorts and housing types. This includes older people’s housing, specialist housing for those with complex needs, such as long-term housing for people with learning disabilities, autism or mental health issues, and transitional housing for those experiencing or at risk of rough sleeping and homelessness or from domestic abuse. Many of the Established Mayoral Strategic Authorities have also indicated supported housing amongst their local priorities in relation to the programme. 

We know that supported housing can often cost more to deliver. In the new programme, while we will maintain the principle that all bids will be assessed for value for money based on their particular circumstances, flexibility on grant rates has been built in for accommodation where the level of design and adaptation results in higher costs. We would encourage providers to come forward with ambitious bids.

We hope the new portfolio approach to bidding, allowing smaller providers to bid for a portfolio of schemes together, thus allowing providers more flexibility to balance risk across more schemes, may also be beneficial to providers of supported housing. The length of the new programme means that it can support more complex schemes that take more time to deliver. In addition, the programme will facilitate acquisitions which play an important role in meeting the diverse needs of supported housing residents. 

C) Increase delivery of community-led social and affordable homes

Community-led developers such as community land trusts and housing co-operatives make an important contribution to market diversification and can deliver affordable homes on sites that are of little interest to mainstream developers.  However, being typically small in scale, often located in rural locations and aspiring to high design standards, the costs are often relatively high. The flexibility in grant rates provided for under the new programme will help community-led schemes achieve viability and help the sector grow towards its full potential.

D) Ensure that the programme can deliver to meet the needs of rural areas

Affordable housing is often more expensive to deliver in rural areas due to development typically being small in scale and in more remote locations. Nevertheless, a truly diverse housebuilding industry should be able to meet needs in all areas. While all bids will continue to be assessed for value for money based on their particular circumstances, the flexibility in grant rates provided for under the new programme will help ensure that rural developments receive the support they require.

Estate regeneration and acquisitions

While the new programme will focus on new supply, it will also support regeneration schemes that provide a net increase in affordable homes.

The government is committed to supporting estate regeneration schemes to transform neighbourhoods and deliver well designed housing and a better quality of life for tenants.  Where there are regeneration schemes that do not meet the existing criteria for additionality of affordable homes, the SAHP 2026 to 2036 will for the first time assess additionality across small portfolios of sites from the provider, with the 10-year programme element being more suited to regeneration timelines.

This will enable our delivery partners to balance additionality over a wider selection of affordable schemes from that provider, meaning that if the CME portfolio or Strategic Partnership provides net additional affordable homes in total, not every individual part of it would need to. This could unlock wider benefits for the area and unlock development sites that are currently unviable. We hope this change will help Mayoral authorities to deliver on their regeneration priorities as set out in the funding guidance.

The programme will also allow for a limited number of acquisitions of existing homes, to support wider delivery while more rapidly increasing the supply of social and affordable homes. We expect this to be mainly used to support the purchase of new-build or off-plan homes, which can support the acceleration of wider housing supply. However, we recognise that there are exceptional circumstances where there is a place for purchasing second- hand homes- e.g. for the creation of bespoke supported homes.

The Capital Funding Guide will provide detailed guidance on eligible procurement routes to access funding for different scheme types.

Devolution - a new role for Mayors outside London

The programme will not have numerical targets or ringfenced budgets for particular regions or types of home beyond confirming the GLA’s portion. However, as the Government committed to in the English Devolution White Paper, we are ensuring that Established Mayoral Strategic Authorities (EMSAs) can set strategic direction for the programme in their area.

EMSAs have set out their ambitions for the types of social and affordable homes they want to see delivered and identified priority sites and growth areas for housing development. Providers will be expected to demonstrate how they have incorporated these priorities into their bids in EMSA areas.

Through the delivery of the programme, via their Strategic Place Partnerships with Homes England, 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.

To support planning, we also committed to setting out upfront indicative spend per EMSA. These figures are intended to guide bids, but they are not a ringfence. The key driver of actual spend per EMSA will be the number of suitable bids that come forward. As such, these figures are neither a ceiling nor a floor for spend in EMSA areas, and they should not act as a cap on ambition. We encourage providers to work closely with EMSAs via their Strategic Place Partnerships with Homes England to develop an ambitious pipeline of affordable housing schemes to support delivery in EMSA areas.

The total indicative level of spend in EMSA areas is £7 billion. This includes indicative spend of:

• £1.8 billion in Greater Manchester
• £700 million in Liverpool City Region
• £1.1 billion in the North East
• £700 million in South Yorkshire
• £1 billion in West Yorkshire
• £1.7 billion in the West Midlands

EMSAs have each set out their overall delivery ambitions for the number of new affordable homes they hope to achieve in the coming 5 to 10 years, and those are included in the Homes England funding guidance for information. The ambitions will be supported in other ways as well as through SAHP grant, including through developer contributions with the s106 system, Right to Buy Receipts, Low Interest Loans and support from the new National Housing Bank, as well as wider funds, like those to be run through the Integrated Settlement for mayors; these indicative SAHP figures should not be taken as an indication of the potential cost of delivering those ambitions.

Expectations of providers and wider support

We can build more homes by working together, and as such we have certain expectations of providers who deliver through the programme.

A) Expectation that providers are working with local authorities to ensure homes go to those most in need

We will expect our partners to meet existing requirements to work closely with local authorities to meet identified local housing need and actively consider their contribution to reducing homelessness. This includes how they allocate homes and alignment of their allocations policy with the local authority’s. For homes funded by the programme, we expect nomination agreements (or their equivalent) to be in place and for these to include 100% of first lets going to the local authority for nomination, unless otherwise agreed with the local authority.

B) Alongside grant delivery, we also expect providers to increase delivery of S106

Section 106 (S106) agreements are, and will remain, an essential mechanism for delivering social and affordable housing. We recognise that many RPs have had to scale back S106 acquisitions over the recent period as a result of acute pressures from severely constrained financial capacity, higher costs of finance, rising building costs and commitments to remediate existing stock to meet building safety and decarbonisation requirements. That is why we took steps in the Spending Review to boost Register Provider capacity and appetite to deliver S106 homes, including a 10-year rent settlement with convergence.

More generally, we also recognise the challenges that now exist as a result of the declining market for S106 over recent years. In December 2024, the government launched the Homes England Clearing Service to help buyers and sellers of S106 homes find each other more effectively. While there are positive signs of an increasing appetite among providers to take on uncontracted and unsold S106 homes post-SR, there remains a legacy problem that must be dealt with.

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.

C) We also want providers to work with us to deliver improvements to the customer experience of Shared Ownership

Shared Ownership can be a transformative route into home ownership, supporting families who would not otherwise be able to get on the housing ladder. We are committed to continue to fund it through the Social and Affordable Homes Programme.

We know that many shared owners confront challenges that they could not have foreseen, such as high and rising service charges, and difficulties when attempting to sell their properties. In the new programme we will expect providers to improve the experience for customers, including through giving greater consideration to long-term customer affordability, increasing transparency and fairness on costs, and giving customers the ability to opt out of fees for services that are optional.

Fees charged to Shared Ownership customers should not be used as a source of profit or a means by which to cross subsidise other areas of work. We will work with providers to ensure that the viability of schemes can be maintained alongside these improvements for customers.

D) Low interest loans

Alongside the provision of grant funding through the SAHP, we know that providers need to borrow more to build more homes but there are constraints on their capacity to take on more borrowing. We will make available £2.5 billion of low-interest loans over four years (2026-2030) to support the delivery of new social and affordable housing.

The loans will be awarded through a bidding process that is closely aligned with the SAHP, and the loans will be administered by the National Housing Bank and by the GLA. This process will be open to private registered providers of social housing and will test the additionality that providers can achieve with loans. As set out in the ‘Homes for London’ policy note published on 23 October, a substantial allocation of the loans will be allocated to London, in reflection of the scale of the challenges London-based private registered providers are facing. We will confirm further details of the loans scheme before the end of the year.

The introduction of the low interest loan scheme, and the SAHP, will entail the completion of the Competition and Markets Authority subsidy control process.^{[footnote 1]}

E) Impact investment

We encourage providers to explore partnerships with impact investors to unlock funding for new social and affordable housing too. More than £6 billion has already been committed by social impact investors, including in investments such as the Octopus Affordable Housing Fund which has raised £350 million and aims to build 1,500 affordable homes for families and older people across the UK. This approach builds on the UK’s leadership in impact investment and aligns with wider government work to partner with the impact economy and unlock new sources of capital to improve the lives of people across the UK.

F) New Towns

New towns will be places for everyone to live, and they should have a diverse range of high-quality housing, with a range of housing types and tenures, including genuinely affordable homes. The recently published New Towns Report has recommended an ambitious minimum target of 40% affordable housing, half of which would be social rent. Partners delivering in New Town locations will be eligible to bid into the Social and Affordable Housing programme to help fund this these homes. 

G) Local Authority Housing Fund

Local authorities will also be supported through the fourth round of the Local Authority Housing Fund (LAHF 4). LAHF 4 will provide funding to councils to enable them to grow their own stock of good quality temporary accommodation therefore reducing the reliance on expensive and unsuitable nightly paid or B&B accommodation. The fund will also provide homes for some families arriving through the Afghan Resettlement Programme. The department will be contacting local authorities to inform them of their initial offer or provide guidance on how they might apply for funding.

1. Homes England is required pursuant to the Subsidy Control Act 2022 to obtain and consider a subsidy report from the Competition and Markets Authority (CMA) before it makes the low interest loans subsidy scheme. The scheme will open following completion of the CMA process to Homes England’s satisfaction. These points also apply to the GLA. ↩