UK: Today’s Spending Review includes a new affordable homes programme, supported by a £39 billion cash injection.
Chancellor Rachel Reeves said the funds will help local authorities, private developers, and housing associations, as part of the government’s broader strategy to deliver 1.5 million new homes during the course of this Parliament.
The new funding represents a major increase on the funding provided by the previous government, which allocated £11.8 billion for the programme over a five-year period. It will help housing associations buy up new units that have already been built by private developers as part of their s106 affordable housing commitments, but which are unused because social housing providers haven’t had the funds to take them on.
Reeves will also allow social landlords to raise rents by one percentage point above inflation for the same 10-year period, another key demand of housing providers.
She said: “Our planning reforms have opened up the opportunity to build, now we must act to make the most of the opportunities.”
Kate Henderson, the chief executive of the National Housing Federation (NHF), which represents housing associations, called it “the most ambitious affordable homes programme in decades”. She added: “This is a transformational package for social housing and will deliver the right conditions for a decade of renewal and growth.”
Brendan Geraghty, CEO of the Association for Rental Living (ARL), said: “[We] broadly welcomes the investment in infrastructure and a new Affordable Homes Programme announced today by the Chancellor as part of the Spending Review 2025. Whilst no direct support for the Build to Rent sector was announced, we welcome the Government’s ongoing commitment to delivering the target total 1.5 million homes and the £39bn of funding for social and affordable homes which, together with Build to Rent, play an essential role in mixed tenure housing supply.”
“The Rental Living Sector will only grow and thrive due to the social and physical improvements intended in this Spending Review and the Sector is ready to play its part in facilitating that change by providing high quality, professionally managed homes for rent across the country.”
Colin Brown, head of planning and development at Carter Jonas, said: “On the face of it, this is a very significant move by the Chancellor to bolster the delivery of affordable housing and the sector will widely welcome it. It will help unlock sites and aid the delivery of private housing, as legal agreements typically seek to align the delivery of market and affordable housing. There remains a pressing need, however, to utilise some demand-side levers as well to encourage home ownership, such as a return to Help to Buy. Of course, there are also ongoing concerns about local government funding and general skills availability to build the homes the country needs.”
Daniel Austin, CEO and co-founder at ASK Partners, added: “The Chancellor’s commitment of £39 billion to affordable and social housing is a long-overdue but hugely welcome intervention. This funding, if deployed effectively, could mark a turning point in tackling the UK’s deep-rooted housing crisis. Crucially, investment must now be matched by urgent planning reform, proper resourcing of local authorities, and meaningful support for SME housebuilders.”
Highlights:
• Chancellor Rachel Reeves announced a new affordable homes programme in today’s Spending Review
• The programme will run for 10 years and is supported by £39 billion
• This is a part of a broader strategy to deliver 1.5 million new homes to improve economic growth and housing affordability
