The government has launched a £163 million fund to support community-led affordable housing. The scheme is being administered by Homes England (the successor to the Homes and Communities Agency) and bids are invited under a 'continuous market engagement' process that will continue until all the money has been allocated or December 2019, whichever comes first.
Crucially, the Prospectus makes it clear that the scheme is available for conversions and refurbishment:
Conversions and refurbishments
20. In addition to new build homes, the Fund will support activities which will lead to the conversion or refurbishment of existing buildings for housing where there is evidence of need for this form of development.
Phase 1 offers 'seedcorn funding' along with funding for enabling works to unlock sites by developing infrastructure such as access routes. It should be noted that there is no guarantee that an allocation of seedcorn funding will produce a subsequent allocation of capital.
The following might qualify for the seedcorn funding:
- the costs of forming a corporate body
- feasibility studies
- architects fees
- legal fees
- training and capacity-building
Funding is paid in tranches (25%, 25%, 40%, 10%) against the achievement of particular milestones, but as far as can be told, there is no requirement to repay grant if the project fails to proceed from one milestone to the next, as might be expected to occur fairly frequently.
Local authorities can bid for the seedcorn revenue alongside community-led groups themselves, but only local authorities can bid for the infrastructure funding. The assumption with local authority bids for seedcorn funding is of course that it gets passed on to relevant local organisations, with an element of further support (apparently a minimum of 10%) from the local authority.
Capital funding for the affordable housing will be part of Phase 2 - not yet open for applications.
The scheme is available outside of London, with the expectation that there will be a parallel scheme in London where the GLA performs the Homes England role.
The rationale behind the scheme is captured by James Brokenshire in his Ministerial Foreword:
The community-led approach to house building galvanises local support and is driven by the commitment and energe of the very individuals and communities that it will benefit. This local support means that this sector is able to deliver locally affordable new homes in places and on sites where commercial speculative house builders cannot. As a result of the close engagement and creativity of local people, the community-led model typically delivers high design quality, high standards of construction and energy efficiency, and uses progressive, innovative building techniques. It supports the smaller house building companies and helps sustain the local economy by providing homes that are affordable at local incomes. For all of these reasons, the Government wishes to see the community-led house building sector grow.
As regards the affordability of housing, this seems to fall within the normal Homes England parameters. But what can be expected to be different is the process of allocations to the housing, as presumably local authority choice-based letting mechanisms will be by-passed in favour of the community group.
And when it comes to capital allocations in Phase 2, rented housing has to be delivered via a Registered Provider, though the community group may manage the stock. But the Prospectus notes that 'Where an organisation is delivering homes for low-cost homeownership (Shared Ownership), for example, there is no requirement for that organisation to be a registered provider.' Given that shared ownership includes an element of rent, the full significance of this is not yet entirely clear.
Current community-based providers who do not currently meet the community-led criterion may find it worth their while to reconfigure their modus operandi to achieve compliance. And local authorities would be advised to support them in doing so to achieve strategic objectives around empty homes.
The split of the full £163 million between revenue and capital and the split between seedcorn funding and enabling works within Phase 1 is not stated and presumably this is to allow maximum flexibility in progressing the programme.