The details of the Chancellor’s Spending Review have been announced today and the fact that £39 billion is being put towards building affordable homes is among the main headlines.
Rachel Reeves confirmed a wide-ranging package of housing and homelessness initiatives, marking the most significant investment in social and affordable housing in a generation. Central to the announcement is a the£39 billion Affordable Homes Programme, set to run over 10 years, aiming to increase the supply of affordable housing and address long-standing shortages.
The investment forms part of a broader strategy to deliver 1.5 million new homes, improve housing affordability, and support economic growth.
Alongside the Affordable Homes Programme, the government is allocating £950 million for a fourth round of the Local Authority Housing Fund, running from 2026-27 to 2029-30. This will support councils in England to increase the supply of high-quality temporary accommodation, aiming to reduce reliance on bed and breakfasts or hotel placements.
To tackle homelessness at an earlier stage, £100 million, including funding from the Transformation Fund, will be directed towards early intervention and prevention, helping people to remain in secure housing and avoid crisis situations.
In addition to direct funding, the government is moving to catalyse private sector investment, confirming £4.8 billion in financial transactions to further support housebuilding between 2026–27 and 2029–30.
Planning system reforms are also underway, including the Planning and Infrastructure Bill and a rewrite of the National Planning Policy Framework (NPPF). The Office for Budget Responsibility estimates that the new NPPF could increase GDP by 0.2% and contribute £6.8 billion to the economy by 2030.
To support first-time buyers, a UK-wide Mortgage Guarantee Scheme will be launched in July, aiming to maintain access to mortgages for those with smaller deposits.
Colin Brown, Head of Planning & Development, Carter Jonas: ‘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.’
Lawrence Turner, Director, Boyer provided this comment: ‘Florence Eshalomi MP rightly stated that today’s Spending Review is “make or break” for fulfilling the Government’s pledge to build 1.5m homes over the course of Parliament. Without this afternoon’s seismic announcement of a £39 billion investment in affordable housing, it was highly probable that the Government would not have even reached halfway towards achieving its housing targets.
‘We now have some hope that this ambitious target could become a reality, rather than just a distant goal. However, to build 1.5m homes, the Government needs to now focus on three areas.
‘Firstly, it is essential that the promised investment is strategically channelled; not solely to housing associations to buy up the affordable allocation on private developments, but also to local authorities’ planning departments. These departments have been stretched thin due to historic lows in Government funding since the austerity years. Local authorities need to have sufficient resources and expertise to determine planning applications swiftly and efficiently, and ensure homes are delivered on the ground.
‘Secondly, given the ongoing cost-of-living crisis, additional stimulus measures are needed to support the housing market. Rising mortgage costs and inflationary pressures have reduced sales rates, particularly for first time buyers. While this year’s planning reforms have been welcomed, many in the industry have been calling for the return of Help to Buy to stimulate the market; and in Kier Starmer’s own words “turbo-charge house building.”
‘Finally, the Government needs to win support from local communities for new housing developments, particularly in rural areas that often do not feel the impacts of the housing crisis first hand. Much of the new strategic housing growth will be planned close to our towns and cities, often in more rural areas. The Government needs a strategy to clearly communicate to these communities why tackling the housing crisis is urgently needed and to demonstrate the long-term benefits that accompany new housing developments for communities.’
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