The chancellor of the exchequer has announced a Affordable Homes Programme worth £39 billion and 10-year social housing rent settlement in today’s (11 June) spending review billed as the ‘biggest cash injection into social and affordable housing in 50 years’.
The Treasury has confirmed a wide ranging housing package to provide access to funding and accelerate the building of affordable homes across England to help hit 1.5 million homes target.
The new Affordable Homes Programme (AHP) has doubled current investment levels, with the deal averaging £3.9 billion a year over 10 years in a long-term investment set to provide more certainty for local authorities, private developers and housing associations.
The previous government’s AHP had a budget of £11.5 billion across five years from 2021 to 2026, with the revamp increasing the yearly funding by 56 per cent from £2.3 billion per year.
For an industry that has seen major changes in recent times, including building safety regulation updates and proposed reforms impact its building activity output, the announcement is potentially a welcome boost.
Direct government funding to support housebuilding, especially for social rent has already seen towns and cities including Blackpool, Preston, Sheffield and Swindon bring forward bids.
Kate Henderson, chief executive of the National Housing Federation described it as ‘the most ambitious affordable homes programme we have seen in decades’.
“Alongside long-term certainty on rents, we are confident it will kickstart a generational boost in the delivery of new social housing that this country desperately needs,” she said.
“We’re proud to have campaigned alongside our members and partners to make the case for a generational boost in investment for social housing.”
Part of Labour’s wider ‘Plan for Change’, Rachel Reeves also confirmed a 10-year social rent settlement from 2026, allowing rents to rise one per cent above inflation and helping housing providers borrow and invest more in new and existing stock.
Reeves said: “This government is renewing Britain, but I know too many people in too many parts of the country are yet to feel it.
“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.”
Its recent planning reforms have been forecasted by the Office for Budget Responsibility (OBR) to add £6.8 billion to the economy by 2029/30 – 0.2 per cent larger than currently.
The OBR has also concluded in their forecasting that this could rise to over 0.4% in 2034/35.
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