The increase in funding via the expansion of the Affordable Homes Guarantee Scheme will provide a much-welcomed boost to the housing development sector. A key area of interest in the expansion of the scheme, as well as the increase in monetary investment, is how the low-cost loans can now be used for upgrading existing properties with renovations and essential building safety works.

The scheme being expanded to cover upgrading existing properties means that a low-cost Government-backed loan can be granted to housing providers to support the decarbonisation of existing properties, as well as improvements to meet or exceed housing decency requirements – the technical standard of quality set for public housing in the UK.

Decarbonisation of housing involves strategies to make existing properties more sustainable and to reduce emissions. This type of property maintenance work and renovations can involve several different strategies, including increasing the energy efficiency of running the property, the introduction of renewable sources, and the utilisation of environmentally friendly building materials.

The fact that the Government has expanded the scheme to support the costs associated with decarbonisation is no surprise, as both the Government and housing providers are placing a growing amount of emphasis on developing sustainable properties

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Not only does this enable them to meet sustainability targets and objectives, but is also vital for future-proofing their assets within their property portfolios. By decarbonising properties, housing providers can ensure they are more cost-effective for tenants in the long run, by saving them money on energy costs associated with running the property.

During the application process, the borrower will be required to submit information on their business plans for meeting net-zero targets, and their plans for improving the quality of their existing properties to meet the UK housing decent requirements.

As well as this information, prospective borrowers must also outline how the loan would be used to support the activities and the progress that has been made in achieving these targets so far, plus a breakdown of total costs that have been incurred from these activities so far.

When applying for a loan to support a new affordable housing development, eligibility requirements state that the homes must be in Approved Pipeline Schemes that have not started on-site at the point of application.

In terms of eligibility requirements, the guidance states that ‘borrowers must undertake to spend an amount equal to at least 50% of each loan on the development of Approved Pipeline Schemes (net of grant) (the “APS Allocated Amount”), with an amount equal to any remaining balance being spent on Existing Asset Investments (the “EAI Allocated Amount”).’

Fortunately, prospective borrowers can apply for the loan for the development of new-build properties, as well as assistance for other affordable home products, including support with decarbonisation or housing decency works on existing properties.


Affordable Homes Warranty:

For years, housing associations have relied on just two or three providers for their affordable homes warranty. We’ve invested time in understanding the social housing landscape and have been proactive in educating stakeholders on how to navigate their options for arranging warranty cover effectively.  If you have a project you wish to discuss, please call 020 3096 0718