North Yorkshire Council
Corporate Director Community Development
5 January 2026
Affordable Housing and Rural Housing Fund
Report of the Assistant Director Housing
1.0 PURPOSE OF REPORT
1.1 This report has been written to provide more information on an application from Broadacres to the Affordable Housing Delivery Fund. It sets out what was considered by the Affordable Homes Funding Panel and its decision to support the award of £435,000 to help fund the development of 15 affordable homes in Hunmanby.
2.0 BACKGROUND
2.1 There is a shortage of affordable homes in North Yorkshire. To help address this issue, on 24 January 2024 the Council agreed to introduce a 100% premium on Council Tax for second homes and to invest the income this created into a range of housing initiatives including the provision of new affordable housing.
2.2 The Second Homes Council Tax Housing Fund Framework was presented to the Executive on 18 March 2025, setting out the programme of initiatives that would be funded through this new revenue. Central to this framework was the creation of three new funds:
· Affordable Housing Delivery Fund (AHDF) – £12m over 4 years, up to £29k per home
· Rural Housing Delivery Fund (RHDF) - £4m over 4 years, up to £40k per home
· Community Housing Fund (CHF) - £4m over 4 years, up to £100k per home
2.3 The AHDF and RHDF are aimed at Registered Providers with the experience and track-record of delivering and managing affordable homes. Both are designed to accelerate delivery and address viability constraints to developments. AHDF can be used on any affordable housing scheme whilst RHDF is specifically ringfenced to support the development of rural exception sites. The CHF will support constituted community groups to deliver homes in particular in areas where more standard delivery models have failed. All funds are now live, with the AHDF / RHDF prospectus shared with all members of the York and North Yorkshire Housing Partnership on the 4 September 2025 and the CHF prospectus available via the website.
2.4 The Affordable Homes Funding Panel (“the Panel”) is chaired by the Corporate Director for Community Development and has been established to consider applications to these new funds. Applications will only be put forward to the Panel following satisfactory discussions between the RPs / Community groups applying and members of the Housing Strategy and Partnerships Team.
3.0 PROGRESS SO FAR
3.1 Initial discussions have been held with several RPs about possible schemes which may need AHDF / RHDF intervention funding to be viable. Support is being given to these RPs so they are able to provide the necessary information in order to make funding applications. As a result it is envisaged that over the next few months these applications will come forward for the Panel to consider.
3.2 An application has been submitted from Broadacres in respect of a development on land at Hunmnaby.
4.0 Land on the south side of Sands Lane, Hunmanby
4.1 Here is a summary of the scheme.
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Key elements |
Response |
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Funding Lot |
Affordable Housing Delivery Fund |
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No of Homes |
15 |
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Tenure split |
6 x social rent 9 x shared ownership |
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Total Grant requested |
£600,000 |
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Grant requested per home |
£40,000 (above maximum intervention rate of £29,000 for AHDF) |
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Will the homes meet an identified need |
Yes – supported by NYC |
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Planning permission |
Allocated site – application submitted but not yet approved. Discussions with NYC planner have been supportive |
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Start on site |
January 2026 |
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Practical Completion |
January 2027 |
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Why viability is an issue |
Significant additional costs relating to abnormal costs, which include road improvements and installation of a pumping station. |
4.2 As shown in the table, the scheme is faced by abnormal costs and therefore the viability gap is too large for it to come forward without accessing the Council’s funding. As an example, it has been identified that the scheme requires the installation of short access road and a pumping station to ensure efficient and safe wastewater management. Should additional grant not be provided then the scheme would fail and the homes would not be able to be delivered.
4.3 The funding prospectus, does include a caveat that “intervention rates will be considered when assessing schemes but higher rates will be looked at under specific circumstances and if a strong case can be made”. Broadacres have mentioned this and asked for a higher rate to be given, as there are significant viability challenges. When weighing up this proposal, consideration was given by the Panel to this ask, along with the importance of maximising the impact of this finite funding pot, securing value for money and the potential level of interest from other partner RPs.
4.4 With that being the case, there are concerns that making provision for a scheme at a significantly higher grant rate at this early stage of the funds lifecycle would set an unhelpful precedent. Therefore, the Panel was recommended that the scheme is approved at £29k per home level (total £435,000). This recommendation was approved on the basis that the shortfall would be made up by other funds to ensure a viable scheme.
5.0 CONSULTATION UNDERTAKEN AND RESPONSES
5.1 Housing delivery – The application form and further supporting information has been shared and discussed with Housing Delivery. They have been able to assess the reasonableness of some of the assumptions included in the application – some of which has not been included in this report as it is commercially sensitive. Significant steps were taken to ensure that the application provided value for money. Assurances relating to elements such as: Land costs per home; build costs; fees and sales proceeds have been considered. These were all in the expected range and therefore reasonable.
5.2 Homes England– In advance of being submitted to the Panel, a meeting was held with the Homes England Growth Team. The overall funding of the project was discussed to ensure overall viability. Without intervention by Homes England, coupled with the AHDF grant from the Council the scheme would have failed and the affordable homes not provided.
5.3 Executive Member for Culture, Arts and Housing – the Executive Member has been briefed on the application received and the Panel’s decision.
6.0 CONTRIBUTION TO COUNCIL PRIORITIES
6.1 The latest Housing and Economic Needs Assessment show there is a significant shortage of affordable housing to meet the needs across the whole of North Yorkshire. Growing the supply of affordable homes is seen as a key priority in the North Yorkshire Housing Strategy and is also a key objective in the York and North Yorkshire Strategic Place Partnership.
7.0 ALTERNATIVE OPTIONS CONSIDERED
7.1 There is a shortage of affordable housing across North Yorkshire and due to market pressures public funding is required to increasethe the delivery of affordable homes.. Whilst Homes England provide grant funding which addresses some of this viability gap, the Council have recognised through the establishment of these funds, often further grant is needed to accelerate delivery and get homes built.
7.2 As set out in section 4, consideration was given on whether to agree to Broadacres proposal of providing a higher level of grant for their scheme. Ultimately it was decided this did not present the best value for money and is therefore not being recommended.
8.0 FINANCIAL IMPLICATIONS
8.1 Using the income generated from the 2nd Homes Council Tax Premium a four year budget has been set for each of the funds. They are:
· AHDF = £12m
· RHDF = £4m
· CHF = £4m
8.2 Funding the Hunmanby scheme equates to a 3.6% commitment from the AHDF.
8.3 Broadacres most recent inspection report from the Regulator for Social Housing (October 2024) gave them the following ratings:
· Consumer C2 – identifying some weaknesses in the landlord delivering outcomes of the consumer standards and improvement is needed
· Governance G2 – a judgement that the landlord meets the governance requirements but needs to improve some aspects of its governance arrangements to support continued compliance
· Viability V2 – a judgement that the landlord meets viability requirements. It has the financial capacity to deal with a reasonable range of adverse scenarios but needs to manage material risks to ensure continued compliance.
9.0 LEGAL IMPLICATIONS
9.1 Any funding award will be subject to compliance with the Subsidy Control Act 2022 and secured through a grant agreement.
9.2 A Subsidy Scheme is being established in respect of the Second Homes Council Tax Housing Fund Framework. Each award under the Framework will be reviewed against the provisions of the Subsidy Scheme to ensure compliance with the Subsidy Control Act 2022.
9.3 The Grant Recipients will be required to enter into a Grant agreement with the Council which will include monitoring and claw-back provisions to ensure the grant is used towards the development of affordable housing.
10.0 VALUE FOR MONEY
10.1 This scheme delivers good Value for Money. Investing £435,000 of the revenue secured through the 2nd homes council tax premium to secure an affordable housing scheme with a project cost over £4m, supporting jobs and local suppliers.
10.2 Research published in 2024 by Sheffield Hallam University outlined that investing public money in social housing offers significant value for money. It concluded the average value of a social tenancy for each household living in a general needs social housing tenancy is at least £18,051 per year. This value includes:
· Savings to the NHS due to improve mental and physical health, with fewer GP and A&E visits
· Savings to DWP and increased tax income, as people with a stable home is more likely to be able to gain and sustain employment
· Savings to local councils by keeping residents out of temporary accommodation and helping people staying independent and less likely to be on the Child Protection Register
· Improved education outcomes to boost the economy, as children in stable homes are more likely to attend school
10.3 It is clear from the evidence provided by Broadacres and the conversations with Homes England that these affordable homes will not be delivered unless the Council provide the Affordable Housing Delivery Fund grant.
11.0 EQUALITIES IMPLICATIONS
11.1 An equities impact assessment screening form has been completed for this report. See Appendix A.
11.2 Building affordable housing has a positive impact on several protected characteristics. Social housing waiting lists have a high proportion of people on low incomes and people with a disability. Providing good quality affordable housing can provide a foundation for someone to thrive and gain a stake in their community. In rural locations the new people living in the homes can help sustain services and support local charitable endeavours.
12.0 CLIMATE CHANGE IMPLICATIONS
12.1 A climate change impact assessment screening form has been completed for this report. See Appendix B.
12.2 Broadacres have confirmed that the new homes will be built to a good environmental standard with energy efficiency features.
13.0 CONCLUSIONS
13.1 The AHDF, RHDF and CHF were developed to help RPs to fill viability gaps and accelerate the delivery of much needed affordable homes in North Yorkshire. The bid from Broadacres offered the panel the opportunity for the first time to discuss a potential scheme, which they approved.
14.0 REASONS FOR RECOMMENDATION
14.1 The reasons for the recommendations are set out in sections 4 & 5. Fundamentally, the recommendations are made with the intention of making the best use of the funding, whilst also recognising the need to retain the integrity of maximum grant per home as agreed by the Executive in March.
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15.0
15.1 |
RECOMMENDATION
Following support from the Panel that the Corporate Director for Community Development in consultation with the Assistant Director Resources approve :
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i) £435,000 be awarded to Broadacres from the Affordable Housing Delivery Fund to support the building of 15 affordable homes in Hunmanby.
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APPENDICES:
Appendix A : Equalities Impact Assessment
Appendix B : Climate Impact Assessment
Andrew Rowe
Assistant Director, Housing – Community Development
County Hall
Northallerton
Report Author – Matt Lewer – Housing Strategy, Partnerships and Enabling Manager
Presenter of Report – Matt Lewer – Housing Strategy, Partnerships and Enabling Manager