Prospects for social housing construction improve after funding agreement

Last Updated:

18th October 2021

The underlying prospects for the听social housing sector听are improving after a number of听funding and framework agreements听were made over the summer.听

Homes England chose 66 companies as preferred partners for its new Delivery Partner dynamic purchasing system听in听the agency鈥檚 largest procurement exercise to date. The deal will听produce 拢20 billion-worth of spending on affordable housing delivered by听developers and contractors (Project ID:听21235829).听

Stephen Kinsella, Chief Land and Development Officer at Homes England, said: 鈥淭his marks a significant step forward in the way we work with developers to build homes.鈥�听

In August, a 拢560 million framework was听also听agreed by JV North 鈥� a group of 13 housing associations and local authorities from Northern England - to build 4,000 homes over the next four years in the region听with 17 contractors appointed听(Project ID:听21159352).听

Funding and contract boost听

Glenigan expects social housing construction starts to rise 10% next year. Economic director Allan Wilen says: 鈥淗ousing associations are now better placed to finance and take forward new developments than in recent years. Government requirements limiting association鈥檚 rent increases to 1% below the rate of inflation have been lifted, providing associations with greater flexibility to increase their borrowing to fund new developments.鈥�听

London has been a bright spot in terms of听social housing construction听starts. Glenigan鈥檚 construction market research shows the underlying value of social housing construction projects starting on site听in the听Capital rising by 4% in Q3 2021.听

Over the next five years,听29,456 homes will be delivered by听councils and housing associations听after the听Mayor of听London secured 拢3.46听billion听from the first round of bidding for the next five-year affordable homes programme.听

Clarion received the biggest grant, totalling 拢240 million. London boroughs will also deliver housing such as Barking & Dagenham, which will receive a grant of 拢171 million.听

Top 10 housing associations听

The听Top 10听housing associations听have awarded 拢1.1 billion-worth of construction contracts in the 12 months to Q3 2021 to build social housing according to Glenigan鈥檚 research.听

The Guinness Partnership awarded the largest amount听with major developments moving onto site including听the 拢55 million听King Georges Gate听in听Kingston-On-Thames听to听deliver 211 new homes (Project ID:听20257971).听

The next biggest spender is Notting Hill Genesis, which has pushed forward with major schemes including a听拢98 million development in Aylesbury (Project ID:听21345531).听Peabody is third with work including a 拢98 million social housing scheme听for听134 social housing units in Herne Hill due to start in November (Project ID:听14338752).听

Top 10 spending housing associations - 12 months to Q3 2021
Housing Association	Total (拢m)
Guinness Partnership	165.5
Notting Hill Genesis	149.3
Peabody Trust	116.5
Metropolitan HP	110.2
A2Dominion	104.6
Sanctuary	95.2
London & Quadrant HT	92.8
Clarion	87.3
Trafford Housing Trust	83.0
Hebridean HP	71.6
TOTAL	1,075.9

Work in the pipeline听

The leading RSLs are also pushing ahead with procurement for major developments.听听

Glenigan鈥檚 market research shows that the Guinness Partnership is currently procuring a contractor for a 拢26 million redevelopment of a former Matalan site in Stevenage to build 526 homes (Project ID:听06481276).听

Notting Hill Genesis is also in the midst of procuring a contractor to build the 拢35 million听Saxon Wharf听scheme to deliver 145 homes in Greenwich, south London (Project ID:听17380397).听

Peabody is at the same stage on its 拢16 million听St Olave's听in Southwark, central London, where work is expected to start on-site early in the New Year (Project ID:听19216243).听

Social housing work looks set to deliver a steady supply of new work to the construction industry over the coming months听and years.听

Glenigan customers can see future social housing construction opportunities as part of your subscription.

Not a Glenigan customer, but would like to see detailed project information for every social housing construction opportunity in the UK? Request a free demo of Glenigan听today so we can show the size of the opportunity for your business.