In summer 2026 the council was one of three councils outside London to become a Homes England Social and Affordable Housing Programme (SAHP) strategic partner, winning a bit for £96.4 million grant funding.
This means that, instead of applying for funding on a scheme-by-scheme basis as we have done in the past, we have more certainty about external funding for our overall housebuilding programme, and at much earlier stage in the development process.
This enables us to expand our ambition to build upon the nearly 900 council homes already completed, to deliver 1,400 more council homes by 2036.
The Homes England funding won't cover the full cost of building these homes.
As a rough guide, a new council home might cost £400,000 to build, but we are able to bring that cost down to £300,000 by building through CIP mixed tenure developments which include market sale homes alongside the council homes. Of the £300,000 cost per home, £120,000 would be covered by the Homes England funding, with the remaining £180,000 per home covered by rents charged to council tenants in the new homes over 30 to 40 years.
The funding through a strategic partnership would also enable us to offer more of our new build council homes on the lowest level of council rent – ‘social rent’, which is discounted to around 40 to 45% of market rents.
Building market sale homes
Building new homes is costly, and the council has limited funds.
On some of our schemes we build homes for sale as well as council homes. As referenced above, the profit from the sale of these market homes subsidises the cost of the council homes on the development.
The number of council homes and market sale homes we build on each scheme varies, depending on what is affordable to the council.
We need to ensure our investment in new council homes doesn’t unduly impact the council’s long-term finances or put delivery of services at risk.
Hidden regeneration costs
The mix of council and market sale homes on each scheme can be substantially affected by the costs associated with compensating people who currently live in existing homes where regeneration is planned.
Everyone who needs to move will be provided with support. This includes £1,250 to help cover moving costs, with council tenants also receiving home-loss payments of £8,100, and homeowners also being paid the market value of their home plus 10%.
In some parts of the city, significantly higher house prices can make the costs far higher than in other parts of the city. This affects the financial viability of redeveloping some of our existing homes.
Applying for Homes England funding
Planning policy requires that 40% of homes on a mixed tenure site are ‘affordable homes’ (or council homes in our case).
Homes England provides funding for any affordable homes (or council homes) that are built above the 40% required by planning policy.
In some cases, where planning committee agrees that a percentage lower than 40% is acceptable, Homes England would fund any affordable (or council) homes built above what has been agreed as being required by planning policy.
Moribund status
Existing buildings that are coming to the end of their life, where the council cannot retain the homes for the long term, can be classed as moribund.
For the purposes of Homes England’s requirement for strategic partners – which says that partners must build a minimum of 800 net new council homes by 2036 – this would mean that all of the new council homes replacing those classed as ‘moribund’ would be considered net gain, and count towards the minimum of 800 new council homes required.
Build to Rent
Another option that can impact the amount of funding Homes England provides is build to rent. Where a development is proposing build to rent homes, the planning policy requirement for the number of these homes that need to be affordable is 20% — much lower than the 40% normally required.
If the council were to consider delivering build to rent schemes in the future, this could mean that funding would be available from Homes England for any of the new affordable homes built above the 20% policy requirement within a build to rent development.
The council is planning to build more than 40% council homes on all development sites, and more than 50% across its housebuilding portfolio. But, setting out the minimum requirement in this way can help to secure more Homes England funding for the difference between what is policy compliant and the additional council homes we want to build, enabling the council to build more, lower-rent council homes in the long term.
