The UK government’s Affordable Homes Guarantee Scheme (AHGS) plays a key role in accelerating the delivery of affordable and social housing by improving access to low-cost finance for housing providers. Originally introduced in 2013 and re-launched with expanded funding in subsequent years, the scheme has enabled thousands of new affordable homes to be built by offering government-backed loan guarantees to housing associations and similar entities.
For developers, investors, and housing stakeholders, understanding how the AHGS works can open doors to partnerships, joint ventures, and socially impactful investment strategies. In this article, Fraser Bond outlines the scheme’s structure, eligibility, impact on the housing sector, and how industry professionals can engage with it.
The Affordable Homes Guarantee Scheme is a government-backed initiative that enables registered providers of social and affordable housing to access long-term, low-cost loans, guaranteed by HM Treasury. The aim is to support the delivery, acquisition, and improvement of affordable housing stock across England.
Loan guarantees of up to £3 billion (as of the latest scheme iteration)
Backed by the UK Infrastructure Bank, offering enhanced borrowing security
Loans are typically available for terms of up to 30 years
Applicable to both new build developments and rehabilitation of existing stock
Supports shared ownership, social rent, and affordable rent homes
Eligible applicants include:
Registered Providers of Social Housing (RPs) – including housing associations
Local Authorities delivering affordable housing directly
For-profit registered providers (subject to scheme criteria)
Partnerships or consortiums working with RPs or councils
Applicants must demonstrate:
A financially robust business plan
Commitment to long-term affordable housing delivery
Compliance with regulatory and governance requirements set by the Regulator of Social Housing
Because loans are government-guaranteed, participating organisations can access cheaper borrowing rates than they might otherwise secure on the open market.
The scheme enables long-dated loans that match the lifecycle of housing assets, ideal for projects requiring capital stability.
By reducing financial barriers, the scheme allows housing associations to build more homes, more quickly, helping to tackle the national housing shortage.
Projects funded through AHGS align with government housing targets and Environmental, Social, and Governance (ESG) goals — supporting impact-led investment.
New Build Developments
Housing associations can use AHGS funding to build affordable rent or shared ownership units within larger schemes, often as part of Section 106 planning obligations.
Stock Improvement and Decarbonisation
Funds can support the retrofit of existing homes to meet sustainability standards, such as EPC C or higher — aligning with net-zero goals.
Acquisition of Existing Units
The scheme allows for the acquisition of newly built homes from developers, ensuring they enter the affordable housing portfolio without delay.
Estate Regeneration Projects
AHGS can fund the replacement and expansion of outdated estates, improving community outcomes and housing quality.
The scheme is administered by the Affordable Housing Finance Plc (AHF) or similar appointed bodies working in conjunction with the UK Infrastructure Bank.
Initial Eligibility Check
Submission of Business Case
Credit Risk and Governance Assessment
Loan Agreement and Government Guarantee Issued
Drawdown and Delivery Monitoring
Successful applicants must provide regular performance reporting, demonstrate financial resilience, and ensure that all homes meet affordability and tenure requirements.
As a trusted advisor in residential and mixed-use development, Fraser Bond supports clients engaging with the Affordable Homes Guarantee Scheme in several ways:
Strategic planning and feasibility for affordable housing delivery
Partnership structuring between developers and registered providers
Site sourcing for AHGS-aligned housing schemes
Investment modelling and viability assessments
Compliance support for ESG, planning, and regulatory benchmarks
Whether you're a housing association expanding your portfolio or a developer integrating affordable housing into your pipeline, Fraser Bond delivers the insight and access you need to align with AHGS funding streams and policy outcomes.
The Affordable Homes Guarantee Scheme is a powerful enabler of affordable housing delivery in the UK, offering long-term finance with government backing. For housing providers, developers, and impact-driven investors, AHGS is not just a funding mechanism — it’s a catalyst for meaningful growth in the sector. With Fraser Bond’s expertise in housing strategy and development advisory, you can position your projects to benefit fully from this innovative initiative.
