Three councils, thirty providers - and bigger question about where grant comes from next

“Councils built this country out of a housing crisis once before.” Prime Minister, Andy Burnham

Homes England has confirmed the first 33 Strategic Partners under the £39bn Social and Affordable Homes Programme 2026 to 2036 (SAHP), sharing £9.58bn to support 73,617 new homes outside London over the next decade. Nearly two-thirds of the homes delivered through these partnerships are expected to be for Social Rent, against a programme-wide target of at least 60 percent.

Only three of the 33 are local authorities: Eastleigh Borough Council (1,042 homes, £154.4m), Newcastle City Council (966 homes, £141.4m) and Cambridge City Council (803 homes, £96.4m). Just under £400m between them, and the three lowest planned delivery figures on the list. Of the other 30, all but one are registered providers - with Vistry Homes Limited taking 3,028 homes and £350m.

Set against the Government's announcement of 24 August, which promised a council housebuilding comeback, at first count three council partners looks to be on the low side - but it isn't necessarily the contradiction it first appears.

Strategic Partnership (SP) was never going to be the council route

The SP route is designed for providers wanting funding certainty across the whole programme and who can start delivering large numbers of homes quickly. Continuous Market Engagement (CME) - the programme's other route - is where the Government has expressly invited councils to bid, on a site-specific basis, and it is where we would expect a significant number to succeed. Over £16bn remains unallocated outside London and around £5bn in London, and the Government has said it intends to prioritise Social Rent and council homes in allocating it. The acquisitions funding cap is also to be raised so councils can buy while they build capacity.

The council delivery story is currently a London story

London takes 30 percent of funding in the early years and up to £11.7bn overall, with the GLA intending to offer at least £6bn. Half of all council homes built in 2024/25 came forward in London, and the Government expects councils to deliver over half of London's homes under this programme. The point that seems to be being made is that devolution plus certainty produces council delivery - which is precisely the argument for what comes next.

Capacity is being built deliberately

Full retention of Right to Buy receipts (£1.61bn in 2025/26), which can now be combined with SAHP grant and unspent Section 106 contributions; £46m of Capacity to Build funding over three years; preferential Public Works Loan Board rates to end March 2027; the HRA threshold raised from 200 to 1,000 homes. Councils delivered the highest number of social homes in 2024/25 since records began in 1991/92 - from a very low baseline, but the figures are moving in the right direction.

The question worth watching

An estimated £2.45bn of this first wave will be spent in the six established mayoral strategic authority areas outside London, whose mayors set the strategic direction of the programme locally. The Government has said more funding will flow directly to those authorities as the programme progresses.

The Government's recently published policy paper commits to establishing Joint Delivery Units between mayors and Homes England. Separately, it states that the approach to the Programme will be consistent with the Cabinet Statement on ‘Rewiring the State’ - including funding mayors through retained taxation rather than grant.

That is a potentially more fundamental shift than a change of paymaster. Homes England grant sits within an established statutory framework that the sector and its funders understand, including the recovery regime under the Housing and Regeneration Act 2008. The GLA inherited equivalent powers for London. Combined authorities outside London have neither, and money routed through retained taxation may not be grant in the same sense at all.

Practically, that raises questions providers and funders will want answered early: what conditions and recovery mechanics attach to the money; whether authorities substitute contractual and security-based protection - charges over completed units, disposal restrictions, consent regimes - where statutory protection is absent; how any of that interacts with existing lender security and asset cover; whether a recycling framework equivalent to Recycled Capital Grant Fund arrangements exists; and how subsidy control is assessed authority by authority.

None of this is an argument against devolved delivery. It is an argument for a common framework, which needs to be settled before the first money moves.

Registered providers remain indispensable

The list confirms that registered providers are where the delivery capacity sits, and they are likely to carry much of the CME delivery too. Their role will also extend well beyond the homes they build directly: development expertise, contractor relationships, private finance and regeneration experience are exactly what councils will also need, as they look to scale up. Expect development agreements, package deals, golden brick structures, regeneration joint ventures and Section 106 acquisitions to be at the forefront.

On which note - the same package of announcements launched a consultation on a standard Section 106 template for medium sites, and published National S106 Affordable Housing Engagement Guidance developed with the NHF, HBF, CIH and LGA. For most of our clients that may prove the more consequential development. We will cover it separately.

Jonathan Corris and Jonathan Jarvis are Partners and Ben Halsey is a Knowledge Development Lawyer at Devonshires.