The changes allow funding for home replacements alongside new affordable homes, as part of wider estate regeneration plans.
The changes aim to make it easier for projects to replace outdated housing that is no longer fit for purpose. Grant funding for estate regeneration is now available to partners looking to replace existing homes with new affordable homes and build additional new affordable homes.
The change will come into effect immediately and funding decisions will be made on a regular basis up until the end of March 2025, subject to availability of funding.
The changes were agreed after consultation with Department for Levelling Up, Housing and Communities.
Commenting on the changes, Housing Minister Rachel Maclean said: "We remain committed to building the affordable homes this country needs and a key part of this is improving the quality and supply of social housing.
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"The changes I am announcing today will unlock more affordable housing by ensuring we replace old homes with ones that are fit for the future. This is absolutely critical in helping us regenerate communities, speed up housing delivery and provide high-quality homes for more families.
"I'll continue to work with Homes England and developers to get delivering through this scheme as quickly as possible."
Reflecting on their involvement, Peter Denton, Chief Executive of Homes England, said: "The affordable housing sector has always had to balance the investment it makes in existing homes with the investment in makes in building new homes. Over the past year, increasing financial pressures have made achieving that balance even more difficult to manage.
"This change is something the sector has been calling for, and with it there is a real opportunity to accelerate the regeneration of social housing and help level up communities across the country.
"We'll be working quickly to make this funding available to ensure partners can get the maximum benefit from this change, and are ready to use all of the tools, capacity and capability we have available to us to support delivery. We encourage all affordable housing providers and local authorities to come and talk to us as early as possible if they need support to develop their proposals – we're here to help."
