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Affordable Housing Supply Programme: process and procedures MHDGN 2022/02

This Guidance Note supersedes MHDGN 2020/02 and is for local authorities and Registered Social Landlords. It details the process for planning the delivery of the majority of grant-funded homes through the Affordable Housing Supply Programme.


Project completion

Grant recipients should notify the grant provider as soon as all of the homes in a project (social rent, mid-market rent and/ or new supply shared equity) have been certified as complete by the project architect/ supervising officer and approved by the local authority for occupation.  A copy of the completion certificate should then be forwarded to the grant provider which will be responsible for recording the actual completion date on the HARP system.

Social rent and mid-market rent

To record final project details, grant recipients should submit through HARP a project completion application – wherever possible this should be done within one month of the date of practical completion.  This should contain (where applicable) full supporting information to allow the grant provider to consider any requests for additional grant funding to cover any unforeseeable and unavoidable cost over-runs (Annex E).

Receipt of this information will enable the grant provider to:

  • record that projects developed with grant funding have been successfully completed
  • confirm the actual housing and tenure mix, and the final costs and funding for the project, which will be used to record progress against housing targets, and
  • identify whether any grant requires to be increased or repaid (for example, in cases where a substantial reduction in capital costs has occurred, or where additional funding contributions for the project were secured beyond those known about prior to acceptance of the grant offer).

In cases where the ownership of homes transfers to another affordable housing provider post completion, the grant provider will arrange for the obligations of the grant offer to transfer to the recipient organisation when the transfer takes place.

New supply shared equity

To record final project details, grant recipients should submit through HARP an initial project completion application – this application should, wherever possible, be submitted within one month of the date of practical completion.  In order to record ongoing property sales, further project completion applications should be submitted through HARP at three monthly intervals until all the properties are recorded on the system as having been sold.  

Receipt of this information will enable the grant provider to:

  • consider any requests for additional grant funding to cover any unforeseeable and unavoidable cost over-runs (Annex E)
  • record that projects developed with grant funding have been successfully completed
  • confirm the actual housing and tenure mix, and the final costs and funding for the project (including where – for justifiable reasons – sales receipts differ from projected levels), and
  • identify whether any grant requires to be increased or repaid (for example, in cases where a substantial reduction in capital costs has occurred, or where additional funding contributions for the project were secured beyond those known about prior to acceptance of the grant offer).

Building on the tender stage example provided earlier in this guidance note, the examples set out below show how a new supply shared equity project can change from tender to completion stage.  These changes will all be captured on HARP and a revised grant offer issued to reflect the final project costs and grant funding:

Actual sales income below that assumed at tender stage

Unit type

No. of units

Market value

Total sales value

Actual tranche sales

Actual sales income

3 person/ 2 bed house

1

£147,500

£147,500

66%

£97,350

3 person/ 2 bed house

1

£147,500

£147,500

60%

£88,500

3 person/ 2 bed flat

2

£137,500

£275,000

60%

£165,000

5 person/ 3 bed house

1

£162,500

£162,500

71%

£115,375

5 person/ 3 bed house

1

£162,500

£162,500

62%

£100,750

 

 

 

 

 

 

Total unit sales

6

 

 

 

£566,975

Total sales value

 

 

£895,000

 

 

Total project cost

 

 

 

 

£880,000

Total grant required

 

 

 

 

£313,025

Total grant required per unit

 

 

 

 

£52,171

Additional grant for the grant recipient

 

 

 

 

 

£14,775

Actual sales income above that assumed at tender stage

Unit type

No. of units

Market value

Total sales value

Actual tranche sales

Actual sales income

3 person/ 2 bed house

1

£147,500

£147,500

66%

£97,350

3 person/ 2 bed house

1

£147,500

£147,500

63%

£92,925

3 person/ 2 bed flat

1

£137,500

£137,500

61%

£83,875

3 person/ 2 bed flat

1

£137,500

£137,500

75%

£103,125

5 person/ 3 bed house

1

£162,500

£162,500

70%

£113,750

5 person/ 3 bed house

1

£162,500

£162,500

67%

£108,875

 

 

 

 

 

 

Total unit sales

6

 

 

 

£599,900

Total sales value

 

 

£895,000

 

 

Total project cost

 

 

 

 

£880,000

Total grant required

 

 

 

 

£280,100

Total grant required per unit

 

 

 

 

£46,683

Grant to be returned to the grant provider

 

 

 

 

 

(£18,150)

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