Seven regional groups call for reclassification of housing investment as infrastructure spend

The groups proposed simplifying the “current cocktail” of funding streams into two clear categories – one dedicated to building new homes and another focused on investing in existing homes.

 

“This approach would eliminate misaligned funding and bidding cycles that hinder progress and slow down delivery,” the submission said.

 

The groups said that investment in existing homes should integrate funding for Decent Homes, decarbonisation and building safety, creating a “more cohesive and streamlined approach to housing upgrades”.

 

In addition, the submission called for housing investment to be reclassified as infrastructure spending.

 

It said: “Reclassifying housing investment as infrastructure spend would unlock long-term funding, enabling consistent delivery, larger strategic developments, and better deployment of resources.

 

“Reclassification is the only way we can we deliver the pipeline of new homes needed, alongside the decarbonisation of existing homes and the renewal of our towns and cities.”

 

Earlier this month, Social Housing explored how classifying housing as infrastructure might affect investment in the sector, and what this would entail in practice.

 

‘United call for long-term investment’

 

This is the first time a collective representation has been made by the six housing partnerships.

 

The groups are: Greater Manchester Housing Providers, Liverpool City Region Housing Associations Group, Hull and East Yorkshire Housing Partnership, South Yorkshire Housing Partnership, West Yorkshire Housing Partnership, and York and North Yorkshire Housing Partnership.

 

The six housing partnerships and Homes for the South West said the submission reflects their “united call for long-term investment that will accelerate housing delivery, enable sustained economic growth, and create lasting prosperity across the country”.

 

“This is a game-changing opportunity for the government to back a transformative vision with the full weight of regional leadership behind it,” the groups said.

 

The submission said the housing sector needs “long-term financial certainty” and a “solid framework to fully support the government’s ambitious housing goals”.

 

“This will increase the supply of affordable homes whilst also delivering sustained economic growth, creating thousands of jobs, and supporting SMEs through ongoing investment in building, regeneration, and retrofitting,” the groups said.

 

“Investment in housing is essential for delivering the government’s ambition on growth, housing and net zero.”

Additional funding for regeneration

 

The regional groups also called for greater flexibility and additional funding for regeneration and renewal.

 

They welcomed changes from Homes England that made funding more flexible for housing renewal but said this support “must go further”.

 

In June 2023, Homes England expanded the Affordable Homes Programme to allow funding to also cover replacing homes as part of estate regeneration.

 

“To truly address outdated, unsuitable housing and meet modern housing needs, we must expand and extend this funding,” the submission said.

 

Grant funding for changes to the Decent Homes Standard

 

The regional groups said that housing providers face “mounting financial pressures” from rent cuts, rising operating costs and new financial burdens such as increased regulation.

 

They said that as the Decent Homes Standard undergoes review, it is “essential” to apply the same principles as the previous programme, which was launched with government grant funding in 2000. These principles include ringfenced funding to ensure effective delivery.

 

“To make the new programme a success, it must be backed by adequate financial support to empower housing associations to meet these new standards and continue delivering high-quality housing,” the groups said.

 

Long-term rent certainty and rent convergence

 

The groups welcomed the government’s rent consultation but said the proposals “must go further”. They said a 10-year settlement aligned with the long-term plan for housing is “critical”.

 

“Legislative measures should be considered to underpin any settlement and provide the confidence and security the housing sector requires to ensure stability and to plan and deliver at the scale required,” the submission said.

 

“Implementing a clear policy is one vital element, but sticking to it is just as important.”

 

The groups also said it was “disappointing” that rent convergence was omitted from the rent consultation.

 

Rent convergence is a principle for ensuring that social housing tenants in similar properties within an area pay similar rents. It was introduced in 2002 but the policy was scrapped in 2015, leaving many social housing rents below the established formula.

 

The regional groups urged the government to include a rent convergence mechanism in the new rent settlement to allow housing associations to gradually increase rents that are below the rent formula.

 

They said that this “vital funding mechanism” could generate an additional £3.5bn in rental income nationally and unlock 90,000 additional new homes.

 

Both the G15 and the deputy mayor for housing at the Greater London Authority have backed the call for rent convergence.

 

In addition, housing secretary Angela Rayner revealed at the Social Housing Annual Conference in November that she was pushing her cabinet colleagues for rent convergence.