"Today’s announcement will help drive growth through our Plan for Change by delivering up to 18,000 new homes, as well as jobs and opportunities, getting more money into working people’s pockets"
- Rachel Reeves - Chancellor of the Exchequer
The Chancellor and Deputy Prime Minister have announced that up to 18,000 new social and affordable homes will be built with a £2bn injection of investment to deliver the Prime Minister’s Plan for Change.
The announcement hails a significant milestone on the government’s promise to build 1.5 million new homes whilst driving economic growth by getting Britain building again. It follows the government’s plan to inspire the next generation of British engineers, brickies and chippies, by training 60,000 construction workers to tackle skills shortages and get more young people into jobs.
The £2bn investment boost comes as a down payment from the Treasury ahead of more long term investment in social and affordable housing planned later this year, which will provide additional funding for 2026-27 and well as for future years. This forms part of the government’s plan for tackling the housing crisis that has held working families back from the stability and security that comes with a safe roof over your head.
Construction boom
Thousands of new affordable homes will start construction by March 2027 and will complete by the end of this Parliament. The government is encouraging providers to come forwards as soon as possible with projects and bids to ramp up the delivery of new housing supply, in turn making the dream of home ownership a reality for more people across the country.
Today’s investment will also unlock development and opportunity on sites that are ready and waiting for spades in the ground in places such as Manchester or Liverpool.
"Everyone deserves to have a safe and secure roof over their heads and a place to call their own," said Deputy Prime Minister and Housing Secretary, Angela Rayner, "But the reality is that far too many people have been frozen out of homeownership or denied the chance to rent a home they can afford thanks to the housing crisis we’ve inherited.
She added, "This investment will help us to build thousands more affordable homes to buy and rent and get working people and families into secure homes and onto the housing ladder. This is just the latest in delivering our Plan for Change mission to build 1.5 million homes and the biggest increase in social and affordable housing in a generation.
Chancellor of the Exchequer, Rachel Reeves said: "We are fixing the housing crisis in this country with the biggest boost in social and affordable housebuilding in a generation. Today’s announcement will help drive growth through our Plan for Change by delivering up to 18,000 new homes, as well as jobs and opportunities, getting more money into working people’s pockets."
Ian Fletcher, Director of Policy (Real Estate) at the British Property Federation, said: “While an additional £2bn in funding to deliver 18,000 extra affordable homes is very welcome, the scale of the challenge remains immense and delivery in many cases will remain closely tied to that of the wider housing market.
"That’s why it is vital that the government adopts a multi-tenure approach to delivery and focuses on areas like Build to Rent, supporting forms of intermediate housing such as discount market rent, which are not dependent upon sales absorption rates.
"Predictable long-term decisions on funding and social housing rents can also help simulate more investment, including private sector investment, in affordable housing. Our big ask at this time is that the further funding due to be announced later this year is linked to a long-term funding programme that allows the sector to plan for growth in the long term.”
Paul Rickard, Chief Executive, Pocket Living, said: “Tackling the viability issues and getting housing schemes from the point of planning consent to a start on site remains one of the greatest challenges that the house building industry faces.
"This is most acute for SME housebuilders who need a rapid turnaround of their developments to simply survive and stay in business. While this is welcome news, we await further details on the allocation between London and the rest of England, especially given the crisis in housing starts in the capital and the shortage of affordable homes.
"We look forward to the longer-term funding announcements and will continue to work with the government on targeted initiatives to support the SME housebuilding sector more widely before it is too late.”
Olivia Harris, Chief Executive, Dolphin Living, said: “This additional funding is very much welcome and needed especially given the huge viability challenges many affordable housing developers are facing which is stymying the delivery of much-needed new housing.
"This is especially so in a place like London where start-on-sites are at near record lows while demand continues to accelerate away. Demand it is vital that we meet to continue to accommodate those who play a key role in keeping our economy going.
"However, if the government really wants to rapidly increase supply, then we also need to have a serious debate on affordable tenure and in some cases switch to intermediate affordable housing, in addition to this extra funding, to really start getting those affordable housing consents converted into building activity.”
