How does Subsidy Control law apply to the Social and Affordable Homes Programme 2026 – 2036?

In this article, Ward Hadaway Partner Alexander Rose explains how the subsidy control regime will apply to the Social and Affordable Homes Programme grants.

Introduction

Homes England is the government’s housing and regeneration agency so is at the forefront of plans to deliver 1.5m new homes by the next Parliament. Allocated £46bn to accelerate and increase the construction of new housing over the next decade, Homes England plans to direct £27bn towards the Social And Affordable Housing Programme (with £11.6bn allocated to the same objective by the Greater London Authority). Certain Mayoral Combined Authorities have been awarded a regional allocation and will play a role in the application process (the current allocations are £1.8bn for the Greater Manchester Combined Authority, £1.7bn for the West Midlands Combined Authority, £1.1bn for the North East Combined Authority, £1bn for the West Yorkshire Combined Authority, £700m for Liverpool City Region; and £700m for the South Yorkshire Mayoral Combined Authority).

Announcing the launch of the application process in Sheffield, Amy Rees CB, the Chief Executive of Homes England said that the programme “marks a significant step in accelerating the delivery of much-needed affordable housing across England” and that the application process was looking for “high-quality, deliverable schemes that prioritise social rent and demonstrate strong value for money“.

How to access funding from the Social and Affordable Homes Programme 2026 – 2036

There are two routes to apply for funding. The Continuous Market Engagement (CME) route allows grants to be secured upon a scheme-by-scheme basis, whereas the Strategic Partnership Framework (“SPF”) involves larger funding packages being awarded to strategic partners delivering at scale.

Applications may be made by registered providers, local authorities, housebuilders and developers, charities and community-led organisations which hold investment partner qualification (the assessment for which confirms that the organisation has the financial and technical capacity to deliver their proposed scheme).

Funding is available for a wide variety of projects, including those that create new social and affordable housing, units to be offered by way of Shared Ownership and Rent to Buy programmes, supported housing for older, disabled or vulnerable people, re-purposing empty homes, traveller pitches and community-led housing.

There is no cap to the level of grant available, rather bids will be sifted taking account of considerations such as value for money, deliverability and fit with strategic priorities. Grant provided by Homes England will be no greater than the calculated viability gap based on an analysis of total costs versus applicant’s maximised financial contributions (including loan debt).

How does Subsidy Control law apply to grants made to support the social and affordable housing market?

Subsidy control is the legal regime that regulates how public authorities in the United Kingdom may use their funds, rights and assets to support businesses and other organisations engaged in economic activity.  Primarily built around the requirements of the Subsidy Control Act 2022, the Homes England SAHP funding agreements specify that the grant may be suspended or recovered from the recipient in the event that an unlawful award of subsidy has been made and a successful challenge is brought.

Housing is a commercial market. Financial assistance from the public sector which gives a party an advantage in such a market will normally be a subsidy (although an assessment will always need to be undertaken as much will depend on the activity funded and the support provided).

To assist with the delivery of the Social and Affordable Homes Programme 2026 – 2036, Homes England has created a Subsidy Scheme, which was (due to the size of awards that it is anticipated will be made under its cover) referred to the Competition and Markets Authority in November 2025. The Subsidy Scheme came into effect on 1 February 2026 and shall run until 31 March 2039.

It is anticipated that all awards made under the Social and Affordable Homes Programme 2026 – 2036 will align with the requirements of this scheme (although should the scheme not provide cover other options to lawfully make awards under the Subsidy Control regime could be explored). Therefore, applicants to the SAHP should design their proposals to align with these requirements.

Conclusion

The Social and Affordable Homes Programme 2026 – 2036 is a major initiative that can be expected to unlock the development of thousands of new units in the coming years. Larger projects may well be in receipt of several different sources of public funding – including from the new National Housing Bank (a subsidiary of Homes England, that has been backed with £16 billion in capital to support the construction of 500,000 new homes in the form of financial products such as debt, equity, and guarantees).  In such situations care needs to be taken to fully consider each intervention, to determine whether a subsidy is present and, if so, to take the appropriate steps to comply with the Subsidy Control Act 2022.

Ward Hadaway has specialist subsidy control lawyers with experience advising upon major strategic developments involving social and affordable housing, commercial property and energy infrastructure. We also have a market leading social housing team that provides expert advice to registered providers.