Lifting the Social & Affordable Homes Programme grant cap on regeneration can help meet the Government’s housing targets

At the recent National Housing Federation’s Development and Regeneration Conference, there was a clear sense of momentum. Across the sector, there is growing recognition that large-scale regeneration must play a central role in meeting the government’s housing ambitions.

That consensus matters. Regeneration requires long term commitment, deep partnerships, and the willingness to navigate evolving policy and market conditions to deliver results, alongside engagement with residents and communities, often over a number of years

When regeneration works, it delivers something unique: the combination of more homes, and better neighbourhoods for all.

At MTVH, we have seen this first-hand. Since forming our joint venture with Vistry in 2022 at Clapham Park, we have been able to start more than 950 homes, even against a challenging economic backdrop. That progress underlines an important point: with the right partnerships and delivery models, regeneration can continue even in difficult conditions.

Elsewhere, we are working with partners Hill Group and the GLA on the regeneration of estates such as Westhorpe Gardens and Mills Grove in Barnet, which will deliver 251 new homes over the life of the project. At West Hendon, our long-term partnership with Barratt is creating around 2,350 new homes, alongside new green spaces and community facilities.

Crucially, these schemes are not just about numbers. They are about working with residents to create places that meet their aspirations. Westhorpe Gardens and Mills Grove was the first regeneration scheme approved through the Mayor of London’s resident ballot, a clear endorsement from the community it will serve.

This goes to the heart of what makes regeneration distinctive. Done well, it delivers a triple benefit.

First, it increases housing supply, often significantly. At Clapham Park, we will more than double the number of homes on the estate, from around 1,900 in 2006 to over 4,300 by 2035.

Second, it improves the quality and safety of homes, replacing ageing stock that will increasingly fall below modern standards.

Third, it creates wider social and economic value, from better public spaces to stronger, more connected communities.

In short, regeneration doesn’t just help tackle today’s housing crisis. It helps prevent the next one. This potential is something the government can now harness through a policy framework which supports delivery.

The decision by government to cap the use of Social and Affordable Homes Programme (SAHP) grant for regeneration at 10% of allocations - in the Homes England programme for strategic partnership applications - reflects a legitimate concern: ensuring public funding is not used simply to replace existing homes without increasing supply.

However, there is equally legitimate concern that the current cap risks being too blunt an instrument. Under the current cap, regeneration schemes which create additionality alongside improvements to older, less suitable homes could be constrained by a cap that does not reflect the full value these projects bring.

Greater flexibility can help to address this. Where providers can clearly demonstrate that regeneration schemes will deliver net additional homes, there should be scope to exceed the cap, ensuring that this sensible safeguard is applied in a way that recognises the diversity and complexity of regeneration.

The sector has demonstrated what is possible when the right models and partnerships are in place. Over the past decade, housing associations and their partners have developed multi-tenure joint venture models that bring in private investment and share risk. These models enable delivery at scale, while remaining adaptable as market conditions change.

“Where providers can clearly demonstrate that regeneration schemes will deliver net additional homes, there should be scope to exceed the cap, ensuring that this sensible safeguard is applied in a way that recognises the diversity and complexity of regeneration.”

At MTVH, we are committed to continuing this approach. We will keep working with communities and partners to deliver regeneration schemes where there is a clear, long-term benefit.

This matters now more than ever. Expectations around housing quality, safety and sustainability are rightly rising. Regeneration offers a way to meet these expectations against a challenging economic backdrop through long-term investment that delivers value over decades: creating homes and neighbourhoods that will serve both existing communities and future generations.

To achieve our shared ambition of tackling the housing crisis, regeneration must be part of the solution. That means giving it the policy support it needs to succeed. Introducing greater flexibility into the Social & Affordable Homes Programme can help to kick start this.

Mel Barrett is the chief executive of Metropolitan Thames Valley Housing