The demand for affordable housing in the North West of England will be at a critical level in 2026, driven by a combination of economic pressures, environmental policies, and a growing population.
The introduction of the Social and Affordable Homes Programme (SAHP) offers new avenues for tackling these challenges. At the same time, recent shifts in government policy underline the urgency of delivering homes that meet stringent energy and environmental standards. This situation presents both opportunities and obstacles for the construction sector in the coming year.
The Role of the Social and Affordable Homes Programme (SAHP)
The Social and Affordable Homes Programme (SAHP) is a key part of the government’s commitment to addressing the housing crisis outside of London. Spanning 2026 to 2036, the programme is backed by £39 billion in funding to deliver 300,000 affordable homes, of which at least 60% are earmarked for social rent. For the North West, this initiative is crucial, given the rising demand for housing for lower-income households, working families, and vulnerable people.
The SAHP prioritises sustainable growth by encouraging brownfield developments, urban regeneration, and the construction of energy-efficient homes. It also aims to maximise the delivery of council-led housing projects and community-driven housing schemes. The programme also supports the creation of specialised housing for older and disabled people. With Homes England as the main body overseeing funding and implementation, the SAHP aligns national priorities with local housing needs, ensuring projects reflect the specific challenges and opportunities of each region.
For developers and construction firms in the North West, the SAHP provides access to substantial grant funding and low-interest loans to support new builds and redevelopment projects. These financial resources are intended to enable stakeholders to contribute meaningfully to solving the region’s housing issues.
Opportunities for Construction in the North West
The ever-increasing demand for affordable housing offers all kinds of opportunities for the construction sector in the North West. One of these is brownfield site development. These previously developed, underutilised plots of land are ideal for creating new housing while preserving greenbelt areas. In addition to addressing the need for affordable housing, the development of brownfield sites also rejuvenates urban areas. It reduces strain on transport networks by situating homes closer to existing infrastructure.
Infrastructure-led growth is another key area. Government commitments to improving planning efficiency and boosting capacity for transport projects provide a framework for connecting new housing developments to major hubs and local amenities. By prioritising developments near transport hubs, construction firms can build communities that support sustainable lifestyles, regenerate run-down urban areas, and reduce reliance on cars.
Sustainability has become a very important consideration in the housing sector. New builds in the North West are increasingly expected to meet high energy efficiency standards, with the government mandating a minimum C rating on Energy Performance Certificates for all rented properties by 2030. What could be an obstacle is an opportunity for construction firms to innovate, incorporate modern building techniques, renewable energy solutions, and environmentally friendly materials. Retrofitting older properties to meet energy standards is also a growing market.
The emphasis on community-driven housing also provides opportunities. By engaging with local councils, housing associations, and community groups, developers can tap into funding and partnerships that ensure housing projects align with local priorities. This collaborative approach can create tailored solutions that strengthen the region’s social fabric.
Challenges Facing the Construction Sector
There are also several challenges for the construction sector in this part of the world. One of the most urgent issues is flood risk. This part of the country is prone to heavy rainfall, and flooding poses significant risks to both new developments and existing properties. Developers must invest in comprehensive flood risk assessments and measures such as improved drainage systems and elevated building designs to ensure projects are resilient.
Contaminated land is another obstacle, particularly on brownfield sites that have a history of industrial use. The remediation of such sites can be costly and time-consuming, requiring advanced geotechnical and environmental assessments. While these measures are essential for ensuring safety and sustainability, they can add complexity and great expense to project planning and delivery.
And there are always costs to consider. Material costs and labour shortages are huge factors in assessing project viability. For smaller developers, these challenges are particularly acute. Ensuring a steady pipeline of skilled labour is essential, particularly as demand for specialist expertise in sustainable construction increases.
The broader economic climate also poses challenges for developers and prospective homeowners. With rising living costs and stricter mortgage lending conditions, the demand for market-rate homes has reduced, shifting the burden of housing delivery towards affordable and social housing projects. For developers, navigating this environment requires careful financial planning and a focus on tenure diversification to balance risks and returns.
So, how best to overcome these obstacles? Collaboration between developers, local councils, and community groups will be critical in overcoming these hurdles. By leveraging the resources and strategic direction provided by the Social and Affordable Homes Programme, the construction sector can play a vital role in creating affordable, sustainable, and resilient housing for the North West.