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Social Housing Grant (SHG)

In summary

SHG is the main capital grant provided by Welsh government to fund the provision of affordable housing in Wales. Housing associations and local authorities can access this funding for the provision of building new homes and the rehabilitation of existing buildings to provide homes at social and intermediate rent. Housing associations use their own funding alongside the grant they receive to build new homes and make public money go further.

As well as general needs affordable housing, the funding can be used to deliver older persons accommodation, wheelchair adapted accommodation, supported housing and extra care housing.

This funding is vital in ensuring schemes are viable and rent levels remain affordable. In recent years, as the ambition and impact of housing associations has increased, the level of funding available has increased significantly from £68m in 2016 to more than £250m in 2021.

Ahead of this Senedd term, our Home manifesto called on Welsh government to invest £1.5bn in SHG to support the delivery of 20,000 new social rented homes.

Following recommendations from the Independent Review of Affordable Housing Supply in 2019, Welsh government is currently reforming the way in which SHG is distributed to social housing providers.

The review made a series of recommendations around the way in which the level of funding is calculated, the way in which decisions over who receives funding are taken, and the eligibility of housing associations and local authorities to receive funding.

Welsh government’s co-design group, which includes representatives from Community Housing Cymru (CHC) and the housing association sector, is currently deliberating over a number of options for the future grant framework. Announcements on the future grant framework will be made in the Summer of 2021.

To measure the success of the emerging proposals, CHC has created four tests for the new framework:

  1. Will the new system deliver more homes?

  2. Will those homes be genuinely affordable?

  3. Will those homes be high quality and fit for the future?

  4. Will all providers with ambition and capacity have a role in delivering those homes?

Briefings/Useful Documents

How we develop this area of work

Our future homes and finance strategic delivery groups play a key role in informing our work on new homes and investment and influencing Welsh government and other decision makers in this area.

The sector representatives on Welsh government’s co-design group on SHG represent a range of housing associations of different type, size and geography.

For more information on how we develop policy, click here.

Full summary

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