Soaring inflation is a “major risk” to the success of the government’s flagship affordable housing programme as grant rates remain static while costs soar, a report from the Department for Levelling Up Housing & Communities (DLUHC) has warned.

A DLUHC report this week warns the increases in inflation and interest rates are “sudden and unforeseen” and are “not reflected in initial bids and grant rates.”

The report on the progress of the £11.5bn affordable homes programme (AHP) said: “The pressures could have a serious impact on the financial viability of individual schemes and also on the overall financial health of providers. This could limit the appetite for grant funding and significantly affect the success of the programme”.