How Much Funding Do Housing Associations Receive from the Affordable Homes Programme?

Affordable Homes Programme Funding Explained

Housing associations are vital for delivering affordable homes in England. The Affordable Homes Programme (AHP) provides grants to support this work. How much funding do housing associations receive in 2025? This guide explains the funding, its impact, and challenges in meeting housing demand. It offers clear insights for readers to understand and engage with the issue.

What Is the Affordable Homes Programme?

The AHP funds affordable housing development. It supports housing associations, councils, and other providers. Grants cover capital costs for homes at social rent, Affordable Rent, or shared ownership. The programme aims to boost home ownership and reduce homelessness. It runs from 2021 to 2026, with completions extending to 2028.

Funding for Housing Associations in 2025

• The AHP 2021–2026 allocates £11.5 billion to deliver up to 180,000 affordable homes across England. Housing associations receive the majority of this funding through two routes:
• Continuous Market Engagement (CME): Allows bids for individual schemes, assessed on cost and deliverability. Open until March 2025, subject to funds.
• Strategic Partnerships: Long-term grants for large-scale projects, with £5.2 billion awarded to 31 partnerships for 90,000 homes by 2028.

Of the £11.5 billion, £7.4 billion is managed by Homes England for England (outside London), and £4 billion by the Greater London Authority for London. In 2025, an additional £2 billion was announced to deliver 18,000 homes, prioritising social rent, with starts by March 2027 and completions by June 2029. Housing associations access this via existing AHP terms. A further £500 million top-up in October 2024 supports 5,000 homes. Data from the National Housing Federation and Homes England confirms these figurers.

Breakdown of Funding Allocation

• ‍Social Rent Homes: Prioritised in 2025, with specific grant rates. About 33,500 of the 180,000 target homes are for social rent, per House of Commons Library. Average grants for social rent homes range from £150,000 to £200,000 per unit in London.‍
• Affordable Rent and Ownership: Initially, 50% of AHP funding supported Affordable Rent (up to 80% of market rates) and 50% for home ownership. Recent shifts focus more on social rent.‍
• Regional Variations: Grants average £50,000–£65,000 per unit nationally, but London’s higher costs see averages of £100,000–£125,000 per unit, per National Housing Federation.

In 2021, Homes England awarded £5.2 billion to 31 strategic partnerships, involving 35 housing associations, for 90,000 homes. The Greater London Authority allocated £3.4 billion for 29,456 homes by July 2023. These figures align with government and National Housing Federation reports.

Impact of the Funding

Housing associations use AHP funds to:

• ‍Build New Homes: The programme targets 180,000 homes, with 157,000–165,000 expected by 2028, per the National Audit Office. Housing associations deliver most of these.‍
• Support Communities: Savings of £9 billion annually for tenants, averaging £5,000 per household compared to private rents.‍
• Boost Economy: Building 90,000 social homes yearly could add £51.2 billion and 140,000 jobs, per the Centre for Economics and Business Research.

However, delivery is lagging. In 2023/24, affordable home starts dropped 60% due to economic pressures, per Building.

Challenges Limiting Delivery

Housing associations face barriers:

• Financial Pressures: Inflation, energy costs, and decarbonisation (EPC rating C by 2030) strain budgets. A £10 billion fire safety bill and £36 billion for zero-carbon goals add costs, per National Housing Federation.‍
• Policy Shifts: The focus on Affordable Rent since 2011 reduced social rent homes. Only 15% of new affordable homes in 2022/23 were for social rent, per House of Commons Library.‍
• Funding Shortfalls: The Levelling Up, Housing and Communities Committee estimates £14 billion annually is needed to meet demand, far above current AHP levels.‍
• Planning and Land Costs: High land prices and planning delays hinder development, per the Ministry of Housing.

Government and Sector Responses

In 2025, the government boosted the AHP with £2 billion for 18,000 homes and a £500 million top-up for 5,000 homes. A new five-year AHP is expected in spring 2025, per Inside Housing. A five-year rent settlement (CPI + 1%) aims to stabilize finances, per Propertymark. Proposed solutions include:

• Increase grants for social rent homes.
• Reform Right to Buy to retain stock.
• Relax council borrowing rules.
• Fund energy efficiency upgrades.

The National Housing Federation urges a 10-year AHP with higher grants to meet the 1.5 million homes target by 2030.

Why This Matters

Housing associations receive £11.5 billion from the AHP to build affordable homes. Yet, financial and policy challenges limit progress. With 1.33 million households on waiting lists, more funding is critical, per Shelter. Understanding this helps readers advocate for solutions. Contact your local council or visit Shelter England for housing support.