SAHP and LSAHP: funding boost for social and affordable homes

The Social and Affordable Homes Programme (SAHP) and the London Social and Affordable Homes Programme (LSAHP) offer significant long-term funding for organisations delivering affordable housing across England and in London.

These capital grant programmes are key to supporting the delivery of social, affordable and specialist housing by local authorities, registered providers and development partners over the next decade.

They will also allow organisations to create long-term business plans for their development programmes, removing uncertainty and breaking the historic four- to five-year grant cycle with its associated peaks and troughs of funding and development activity.

The funding will be used to deliver general needs homes for rent and ownership, specialist and supported housing, community-led housing and rural homes, and to regenerate existing estates as part of the wider national commitment to build 1.5m homes by mid-2029. 

The SAHP magnifies the focus on social rent, increasing the expected minimum of 50% under the previous 2021–2026 programme to a minimum of 60%.

The funding routes under the SAHP are as follows.

• Continuous market engagement (CME) is split into two strands managed under the same grant agreement framework:
  • General CME route, which appears to follow the current form of CME, i.e. bids on a scheme-by-scheme basis for grant with payment against specific delivery milestones.
  • Portfolio CME route, which is a new route of funding specific to the SAHP that seeks to bridge the gap between general CME and strategic partnership. This route is aimed at organisations that have development programmes but, presumably, those programmes are not substantial enough to warrant becoming a strategic partner. We expect that this will offer a pot of funding for a programme similar to strategic partnership but with funding payable at specific delivery milestones.
• Strategic partnership appears to follow the existing strategic partnership arrangements under the 2021–2026 programme. However, the minimum number of homes required to be delivered differs depending on the nature of the bidding entity, as does the maximum capped amount of funding available for that entity. Homes England will take into account existing delivery obligations and funding under existing strategic partnership arrangements – when considering the cap on funding – on a rolling basis. If strategic partners have uncommitted strategic partnership grants from a previous programme, this will presumably be netted off the cap when assessing how much funding a strategic partner can bid for under the SAHP.

A new element, Strategic Partnership Plus, is available only to existing strategic partners but with considerably higher delivery targets for those who can demonstrate the appetite and capability to deliver.

Contrasting with the SAHP, the LSAHP will focus on social rent, shared ownership, intermediate rent – including key workers – and London Living Rent to prioritise meeting the capital's acute housing needs and delivering a range of affordable tenure types tailored to local demand.

The funding routes are as follows.

• Indicative proposals is the GLA's long-term delivery route where providers should 'be ambitious' and bid for an indicative programme of delivery during the 10-year term of the LSAHP. There is no specific route, as such, for bidders to apply for strategic partner status – this will be assessed by the GLA based on a ranking methodology using the number of social and affordable homes to be provided, with the 'top' bidders being awarded strategic partner status.
• CME will not open until the indicative proposal process has been completed. While it appears the CME will follow the traditional route of considering bids on a scheme-by-scheme basis for grant with payment against specific delivery milestones, there is an indication that, due to the length of the LSAHP, the GLA may open an indicative proposal route within CME part-way through the programme. There is no substantial detail on this yet but we expect it will be akin to the portfolio CME approach announced as part of Home England's SAHP.

For SAHP, applications for strategic partnership funding close on 15 April 2026, but applications for continuous market engagement funding can be submitted at any time throughout the programme. For LSAHP, first-round applications close in April 2026. The first funding decisions are expected shortly thereafter in order to maximise early delivery.

Local authorities, registered providers and other organisations intending to apply for funding under these programmes will need to demonstrate how their project will deliver against national or London priorities.

Those developing projects in Established Mayoral Strategic Authority (EMSA) areas will also need to demonstrate how they are meeting the EMSA's strategic priorities alongside national priorities.

The SAHP and LSAHP programmes indicate that grant recipients will not be able to use this funding to deliver social and affordable homes secured by developer contributions through section 106 of the Town and Country Planning Act 1990 or equivalent planning conditions, which was also the case on the previous funding programmes.

However, both programmes also indicate that successful bidders are expected to continue to support delivery of affordable housing by acquiring units under section 106 agreements.

It is unclear what, if any, implications there will be if grant recipients fail to do so but this reflects the government's clear commitment to resolving current systemic issues with section 106 delivery.

This provides a mechanism for the government to support registered providers that are facing interest cover constraints in raising the debt necessary to leverage grant received under the SAHP and LSAHP.

There is likely to be high demand for the loans, which will be made available through a competitive bidding process similar to the SAHP.

Registered providers will need to demonstrate net additionality and value for money in accordance with HM Treasury's The Green Book.

Subsidy control remains a key consideration for the SAHP. As both programmes are 'subsidy schemes of particular interest' they were referred to the Competition and Markets Authority for review before being finalised and published on the subsidy database (SC11452 and SC11472).

A version of this article was previously published by Bevan Brittan in February. The article reflects the law and market position at the date of publication and is a general guide. It does not contain definitive legal advice, which should be sought in relation to any specific matter.