A new approach to retrofitting social housing

As many CIH members will know, the need to retrofit existing homes in the social housing sector is a major challenge for all private registered providers (PRPs). As the need to modernise and decarbonise the whole of the residential sector grows more urgent, the question is how to fund it.

In January this year a major change to the Affordable Homes Guarantee Scheme (AHGS) was announced. To date the £3 billion scheme has been focused on providing low cost corporate level debt finance, to help build more affordable homes. It’s been successful, already unlocking over 6,500 homes with thousands more to follow.

Now, however, the revised scheme will be able to help facilitate not just the development of new homes, but the retrofitting of existing stock. The retrofitting can be for modernising homes to meet safety or decency standards, for decarbonisation or a combination of both.

The scheme has been doubled in capacity to £6 billion and the application deadline moved out to April 2026. A PRP can apply for a corporate loan to support both the building of new homes and improving their existing stock – a minimum of 50 per cent of the loan must support new build, but otherwise the balance between new and existing is up to each applicant.

Retrofitting homes is a slow and complex process, so much greater flexibility has been included in the scheme. The deadline for spending the relevant amount for retrofitting is 72 months (aligned with financial year) and oversight will be proportionate. A PRP would be required to provide a business plan for their retrofitting programme and then annual progress reports thereafter. This avoids implementing an additional policing mechanism on site, and the costs that would involve. The deadline for starting on site for new homes has also been extended to 36 months post funding.

Already several PRPs are beginning the application process to secure this new funding. The scheme is run by ARA Venn, through Saltaire Housing Limited. More details can be found at here.