The agency hopes the changes to permitted allocations through the Government’s Affordable Homes Programme 2021-26 will help to accelerate big estate renewal plans.

The funds can be used for both new replacement homes and new affordable homes.

This means that the housing and regeneration agency can better support its partners to replace housing that is outdated and no longer fit-for-purpose, with a larger number of energy efficient new affordable homes.

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.”

He pledged to introduce the change with immediate effect and confirmed funding decisions would be made on a regular basis up until the end of March 2025, subject to availability of funding.

“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.”

This change to the Affordable Homes Programme has been agreed with the Department for Levelling Up, Housing and Communities, and is part of the Agency’s wider efforts to help bolster the affordable housing sector and maintain housing supply.

It also aligns with the agency’s five-year strategic plan, published in May, which clarifies its mandate to drive regeneration and housing delivery to create high quality homes and thriving places across England.