The funding will be allocated for a period of up to 10 years, longer than the common three to four years. The associations will have to bid for these funds.
The government will provide housing associations with £2bn in funding to help build affordable homes from 2022, Prime Minister Theresa May has announced.
The funding will be allocated for a period of up to 10 years, longer than the common three to four years. The associations will have to bid for these funds.
May outlined plans at a conference of the National Housing Federation, which represents housing associations.
She said: “For many people, a certain stigma still clings to social housing. Some residents feel marginalised and overlooked, and are ashamed to share the fact that their home belongs to a housing association or local authority.
"We should never see social housing as something that need simply be “good enough”, nor think that the people who live in it should be grateful for their safety net and expect no better.
“Whether it is owned and managed by local authorities, [tenant management organisations] or housing associations, I want to see social housing that is so good people are proud to call it their home… Our friends and neighbours who live in social housing are not second-rate citizens.”
Reaction to the announcement has been positive.
Jackie Bennett, director of mortgages at UK Finance, said: “Today’s announcement provides much needed certainty regarding the government’s commitment to the social housing sector, enabling housing associations and their private funders to plan and build for the future.
“Affordable housing across the UK is an economic and social priority and lenders are committed to playing their part.
“The industry provided £8.6 billion of private finance for social housing in 2017, helping to fund affordable homes across the country.
“UK Finance and its members now stand ready to work with the government and housing associations to supportlong-term investment in affordable homes."
Ben Denton, managing director of Legal & General Affordable Homes, was also pleased.
He said: “This will help to deliver more homes at levels that residents can afford in areas which need it most. This additional funding will be allocated over a much longer period - to 2028/9 - allowing developers and housing associations to plan with much more certainty.
“Whilst good news, there is still more work to be done. Over the past decade, only 3,000 affordable homes have been delivered each year, highlighting the need to smooth the way for more institutional money to enter the sector.
“Having recently launched our affordable homes business, we are looking forward to proactively working with government and local authorities to bring forward institutional funding to deliver the additional affordable housing that the nation so desperately needs.”
David Orr, chief executive of The National Housing Federation, welcomed the plans.
He said: “For years, the way that money was allocated meant housing associations couldn’t be sure of long-term funding to build much-needed affordable housing.
“By changing the way in which they allocate funding, ministers have given long-term confidence.”
The money will be taken from housing budgets in the next spending review period and the details are not expected until next year.
However John Healey, Labour's shadow housing secretary, said that May’s promise falls short of what is needed.
He said: “Any pledge of new investment is welcome, but the reality is spending on new affordable homes has been slashed so the number of new social rented homes built last year fell to the lowest level since records began.
“If Conservative ministers are serious about fixing the housing crisis they should back Labour’s plans to build a million genuinely affordable homes, including the biggest council housebuilding programme for over 30 years.”
