Change in grant rules will boost for-profit providers, Homes England director says

“So it is a welcome boost, because I think… in terms of cashflow support, it’s much better for them,” he added.

Ms Islam said the rule change has received good feedback from for-profit providers, which previously warned of being held back by a “two-tier” approach on grant funding.

From April 2026, for-profit providers will be able to notify Homes England of disposals on a quarterly, retrospective basis.

In a statement, Homes England said: “We have removed differences specified by status as a for-profit or not-for-profit that were in place under the previous programme. This particularly impacts the payment mechanism and working with delivery partners (eg payment on incurred expenditure).

“We are also pleased to confirm that the ‘onward sale’ concept will no longer apply. Instead, all disposals will be managed consistently through the disposal notification process.”

Mr Islam said the changes are part of an “evolution” of the strategic partnership model, which opened to for-profit providers in 2021.

“We have the lessons learned around how we engaged with those for-profit partners to be able to apply further parities with the not-for-profits in this programme,” he said.

Homes England is also looking at “more extensive” changes to its capital funding guidance, Mr Islam said, based on feedback from the sector on “parity around the uplift rules when it comes to recovery of grant” and shared ownership staircasing transactions.

Currently in shared ownership staircasing transactions, all partners need to recover some of the grant, but for-profits also have to recycle or recover the associated uplift value, Mr Islam explained.

This leads to “uncertainty” among for-profits and investors, he said, because uplifts are applied based on market values at the time, so the “forecast of returns… becomes very unpredictable”.

Mr Islam continued: “We’re trying to understand whether the calculator can be amended to manage some of that uncertainty. 

“So we’re not going to get rid of uplift as a concept, but… we can potentially look at our current rules – can they be more flexible? Can they be more amenable in terms of giving the investor more confidence in investing in shared ownership homes?”

“We are talking to a lot of our for-profit partners to understand that in a bit more detail… If we do make any changes, they won’t be immediate. They’ll be delivered through the development of the next financial year,” he added.