REGISTERED PROVIDERS From purchaser to partner
 | Charles is an Associate Partner at Carter Jonas, working within the Valuation team in London and specialising in affordable housing. |
Charles and Francis explain why Registered Providers are seeking an earlier role and more control in development to secure long-term affordable housing supply. “Earlier involvement gives it the opportunity to help determine what is built, when it is built and how the homes will work as long-term assets.” |
For many years, a significant proportion of affordable housing has been delivered through Section 106 agreements, with a Registered Provider (RP) acquiring the designated s106 units from the developer or through land-led schemes, directly to purchase and develop land for affordable housing, often with the help of grant funding. The s106 model gives the RP relatively little influence over the scheme it will ultimately own and manage, and leaves its future supply dependent on development brought forward by others.
A change in emphasis
That is changing, especially on larger or more complicated schemes, where RPs are becoming involved at a much earlier stage, including through joint ventures with developers, landowners or public bodies.
Rather than simply acquiring s106 units after the tenure, specification and other key elements have been negotiated, RPs are increasingly looking to participate directly in development, securing a longer-term pipeline of homes from such schemes.
The involvement of public bodies is also set to increase as Andy Burnham has put council housebuilding at the heart of his domestic policy agenda, promising “the biggest council housebuilding programme since the post-war period”.
This shift gives RPs greater control over future supply. A s106 acquisition remains an important source of affordable housing, but the RP is ultimately dependent on the sites, timescales and affordable housing packages brought forward by other developers. Earlier involvement gives it the opportunity to help determine what is built, when it is built, and how the homes will work as long-term assets.
A greater appetite for direct involvement in development can sit alongside s106 acquisitions. Grant can support both the acquisition of s106 homes and partnership-led development.
The importance of partnerships
RPs are undoubtedly making development decisions in a tighter financial environment than a decade ago. The Regulator of Social Housing’s 2025 Global Accounts recorded £10bn of repairs and maintenance expenditure, while total interest costs rose by 8% to £4.8bn. Its measure of interest cover, after major repairs spending, fell to 87%.
Every development competes with other demands on the balance sheet. RPs’ financial responsibilities cover existing homes, building safety, energy performance and service quality, while also maintaining financial resilience. These commitments understandably affect their appetite for taking on development risk alone, particularly among traditional RPs which may have a substantial legacy of existing homes to maintain and upgrade.
Joint ventures are becoming an increasingly popular mechanism for delivery because they can share that risk, while allowing the RP to remain directly involved in development. One party may contribute land, another development expertise, and another long-term ownership or management capability. Construction risk, planning risk, capital requirements and returns can be allocated across the partnership, rather than sitting with one organisation. On a regeneration scheme or a large, phased development, this is a rational approach which avoids making the RP solely responsible for funding and management risk.
There is also a planning benefit to joint ventures. Bringing the eventual affordable housing owner into a partnership earlier can help settle tenure, specification, phasing and management requirements before they become late-stage viability or delivery problems. This gives the RP greater certainty over the homes entering its development pipeline rather than relying principally on s106 opportunities as they become available.
The importance of grant funding
A partnership can redistribute risk, secure a longer-term supply of homes, and bring more capital into a project, but it does not make the underlying affordability gap disappear. Social rent is priced below market rents, and if development costs exceed what that rental stream can support, subsidy is still required from somewhere within the structure.
Grant funding therefore plays an important role in enabling affordability and additionality. It can help RPs acquire s106 homes, but grant invested alongside a joint venture can also enable a larger affordable component, an earlier start, and more homes for affordable rent which may otherwise prove unviable.
The government, in its August 2026 policy paper The Social and Affordable Homes Programme and the reinvigoration of council housebuilding, described the response to bidding as an “unprecedented appetite” for support - a sign that demand for grant funding remains considerable.
Furthermore, the recently updated Social and Affordable Homes Programme is moving in this direction and providing the necessary flexibility. Alongside strategic partnerships, Homes England offers Continuous Market Engagement and a portfolio route designed to give funding certainty across groups of sites and to de-risk development pipelines. It also allows consortium and developer-delivery structures.
Looking ahead
There is potential to go further. For programme funding to translate into the greatest possible number of homes, the funding system should recognise that RPs increasingly want to secure their future supply by becoming involved in development, rather than simply acquiring the affordable element of schemes negotiated by others.
That means making grant commitments early enough to help unlock land or a development agreement, providing sensible flexibility to substitute sites within portfolios, and setting funding milestones that reflect the realities of planning, land assembly and procurement. Grant can also be combined more deliberately with other forms of public finance - including the £2.5 billion low-interest loan fund being made available to private RPs at interest rates of just 0.1%, with £1bn administered by the National Housing Bank, and £1.5bn by the GLA.
Emerging and future models should be judged by what they deliver. If a joint venture shares risk, gives an RP greater influence over the homes it will ultimately own, and creates a reliable pipeline of affordable housing over several years, it has a substantial advantage over relying solely on opportunities generated through s106 agreements. Grant remains important because it can make those homes genuinely affordable.
The natural progression, therefore, is towards a funding regime which enables RPs to move upstream in the development process, with grant, low-cost debt, land and private capital sitting within the same delivery structure. S106 acquisition will remain important, but greater involvement in development gives RPs something it cannot always provide: greater control over their long-term housing supply.
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