The Government is set to include a £39bn investment boost for social and affordable housing within today's Spending Review.
Chancellor Rachel Reeves will centre the review on the £39bn affordable housing investment. The funding will support local authorities, housing associations and private developers over the next 10 years, with annual affordable housing investment almost doubling to £4bn by 2029–30, up from £2.3bn between 2021 and 2026.
This is more than the £25bn predicted by industry experts.
Arguing that the Government is “renewing Britain”, the Chancellor will say: “This government’s task – my task – and the purpose of this spending review is to change that. To ensure that renewal is felt in people’s everyday lives, their jobs, their communities."
However, the pre-released statements make no mention of the reported plans to introduce a UK 'housing bank' through public body, Homes England, to deliver lower-cost finance to the housing industry.
Sources had previously reported that Reeves could announce the plans for a “British housing bank” as early as the Spending Review.
The plans would enable the government, via Homes England, to more easily deliver cheaper financing to housebuilders by redesignating it as a “public financial institution”.
Kate Henderson, chief executive of the National Housing Federation, said the package was the "most ambitious affordable homes programme in decades", adding that "it will kick‑start a generational boost in the delivery of new social homes".
Mairi MacRae, director of campaigns and policy at Shelter, commented: "This increased investment is a watershed moment in tackling the housing emergency. It’s a huge opportunity to reverse decades of neglect and start a bold new chapter for housing in this country.
"For too long, past governments allowed thousands of social homes to be lost each year, while funnelling public money into so called ‘affordable homes’ which are priced far out of reach for many. The result has been record homelessness, and families, young people, and key workers priced out of their communities.
"Social homes are the only genuinely affordable homes by design with rents tied to local incomes and around two thirds lower than private rents. They keep communities together, save public money and provide the stability people need to thrive. To ensure this funding tackles homelessness at its root, the government must now set a target for how many social rent homes it will deliver through this programme."
Melanie Leech, chief executive of the British Property Federation, said: "With really tough choices to be made in the Spending Review, we are delighted that the Government has prioritised the delivery of affordable and social housing and that it is investing significant additional sums to support a sector that has faced tough headwinds in recent years."
Paresh Raja, CEO of Market Financial Solutions, added: "The £39 billion investment in affordable and social housing is hugely positive news. If more homes are to be built across the UK, funding and policy must go hand in hand; for all the talk of planning reform, and the use of AI in improving the planning process, there's no escaping the fact that significant investment is required.
"Amidst concerns that Labour's promises of tackling the housing crisis would amount to little, this announcement could signal a notable step forward. Government investment will encourage activity from the private sector, injecting fresh life into the housebuilding industry. As ever, lenders must be ready to respond in turn; ensuring different types of borrower, from first-timer buyers to seasoned investors, are supported with the right products and fair, diligent ways of assessing applications is going to be absolutely vital in creating a more equitable future for the UK property market."
