A complete programme
The Trust secures public land on long peppercorn leases, tenders the construction against its specification and pays contractors in cash as work is certified. Government is the anchor purchaser of the bonds that fund the programme. Residents take long leases and their rent covers bond payments, maintenance and management.
The pilot establishes the operating record for subsequent investment: completed homes, verified delivery costs, occupied properties, rent collection, repairs and audited accounts. Those results provide the evidence for expansion and for investment by institutions and savers.
Why the original pilot was upscaled
Earlier versions of the proposal used a pilot of 100 homes across three sites. Detailed programme costing increased that to 500 homes across ten sites. The change follows the economics of setting up the programme and the breadth of evidence required from it.
Spread the setup costs
Establishing the Trust, arranging its registration, preparing the bond documentation, appointing its advisers and staffing the organisation through construction all carry substantial costs before the first rent is collected. A smaller pilot still needs that core organisation. Spreading those costs across more homes reduces the amount each household’s rent has to support.
Improve affordability from the first programme
In the proposal’s costing, the programme layer falls from about £33,000 per home at 100 homes to about £15,000 at 500. The larger pilot brings the funded cost per home down and widens the income range it serves. The costed pilot reaches households from approximately £48,000 gross income; extending affordability further down the intended cohort depends on lower construction prices and greater scale.
Demonstrate delivery across different places
Ten sites provide experience across site conditions, local authorities, regional labour markets and contractors. That produces a broader operating record than three sites and establishes how the same specification and funding structure perform in different settings.
The effect of scale
| Proposal estimates | Original pilot | Current pilot |
|---|---|---|
| Homes / sites | 100 / 3 | 500 / 10 |
| Programme layer per home | About £33,000 | About £15,000 |
| Funded cost per home | About £228,000 | About £211,000 |
| Monthly rent | About £1,120 | About £1,050 |
Rounded figures from Appendix I.6. Programme-layer estimates require quotations before commitment.
What the £110 million headline covers
The headline is a rounded description of the model’s approximately £105 million bond-funded programme. That funded cost covers the construction contracts, professional fees, programme costs and interest during construction.
Roads, drainage, utilities and site preparation are essential costs of delivering the pilot. They sit outside the approximately £105 million bond-funded programme and the rounded £110 million headline. The full cost of delivery therefore includes a separate infrastructure contribution.
Homes England must fund the infrastructure
The pilot requires Homes England to fund the enabling infrastructure through a capital grant. The identified funding route is the National Housing Delivery Fund (NHDF), which provides grant support for infrastructure and land, including site preparation and utilities. The infrastructure grant and the bonds perform separate roles: the grant makes the sites ready for housing; the bonds fund the homes and the associated programme costs.
The Trust must establish the infrastructure scope and cost for each site and secure the funding agreement before construction commitments are made. This is a required public contribution to the pilot. It is additional to the bond-funded headline and must be shown explicitly in the delivery budget. No infrastructure grant award is assumed to have been secured.
The NHDF is an established funding route, but an award requires approval. Its published guidance excludes projects with new leasehold houses. The proposed residential lease structure must therefore be agreed with Homes England and its compatibility with the funding rules resolved before the pilot proceeds. Sites within an Established Mayoral Strategic Authority area must follow the relevant authority’s capital-funding guidance.
The costed pilot rent is approximately £1,050 a month. The lower-rent reference case and the £800 affordability target remain distinct from the pilot estimate. The pilot starts the programme at a viable delivery scale; lower costs at wider scale extend its reach.
Delivery and the next stage
Land, planning, legal structure and infrastructure arrangements precede commitment. Competitive tenders establish the construction price. Government purchases the pilot bonds in tranches matched to delivery, and contractors receive certified stage payments.
Letting and management then establish the rental-income record. The proposal sets out a government sell-down after two to three years of full occupancy and audited performance, subject to a suitable market. Holding the bonds to maturity is an alternative. Further pilot tranches build the evidence base before wider investment where needed.
References to the pilot on this website mean the 500-home, ten-site programme. The original 100-home version remains visible in the source’s costing comparisons so the reason for the increase is clear.