17 May saw the close of the pre-qualification process for those public and private sector organisations wishing to apply for Social Housing Grant (SHG) to subsidise the cost of building affordable homes under the Housing Corporation’s National Affordable Housing Programme (NAHP) for 2008-11.
The full prospectus requiring more details of particular projects is to be launched in September.
Initially only available to housing associations registered with the Housing Corporation, from 2006 this was also thrown open to private sector developers in an effort to increase greater efficiency in the sector. This latest NAHP round has extended this further to local authority vehicles as well as certain top performing ALMOs (Arm’s-Length Management Organisations).
The previous 2006-08 NAHP round has seen an allocation of £3.3 billion over two years to help fund housing schemes with some developers alone receiving in excess of £100 million. The precise allocation for the 2008-11 round has yet to be determined (as it is subject to outcome of the comprehensive spending review) however it can confidently be predicted to be well in excess of £1 billion a year.
With figures like these, any developer, housing association or other key player in the social housing sector (including local authorities themselves) contemplating regeneration or other developments involving a significant amount of new build housing should arguably have been considering whether it wished to make an application for SHG, whether alone or as part of a consortium.
The opportunities are still there
Organisations can no longer qualify for “investment partner” status for this round and thus bid directly for SHG when the full prospectus is launched in September. However, there are other options available in terms of accessing SHG on future projects: it is simply a question of teaming up with the right partner who has already pre-qualified. And doing so quickly. Indeed this sort of “piggy-backing” is the option that most developers in practice adopt.
In most instances if you are a developer or housebuilder, your ideal partner will be a housing association. In practice most developers are used to working with housing associations when it comes to ownership and long term management of social housing units on their schemes. In terms of ease of process, this is still the most likely route that many developers will take even if they are “investment partners” (preferring not to go down the rent charge route and instead signing up to a much more simplified form of Grant Agreement with the Housing Corporation). Virtually all of the largest housing associations are likely to be investment partners and as such able to bring a significant amount of additional external finance to the party.
If you have any questions on Social Housing Grant or the National Affordable Housing Programme, or wish to be put in touch with potential partners for a new scheme, please contact Robin Baillie.