"Today's news is a really positive boost for the housebuilding industry and a step in the right direction. There aren't enough affordable homes, so we welcome any initiatives that will help the sector to deliver more of these homes to market"
- Alex Slater - Rightmove
Taking centre stage, and widely reported in the media ahead of the Review, was the "biggest cash injection into social housing" in 50 years.
Arguing that the Government is “renewing Britain”, the Chancellor acknowledged that “too many people in too many parts of the country are yet to feel it”, adding, “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,”
She added that this has been "neglected for too long - but not by this Labour government".
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.
Reeves said: "A new Affordable Homes Programme – in which I am investing £39bn over the next decade.
"Direct government funding that will support housebuilding, especially for social rent, and I am pleased to report that towns and cities including Blackpool, Preston, Sheffield, and Swindon already have plans to bring forward bids to build new houses."
As you would imagine, the property industry was quick to react to the news. Here's what they're saying:
Richard Donnell, Executive Director of Research at Zoopla, comments, "Increased investment in affordable housing is vital to support the ambitions to build 1.5m homes. The nation can't spend its way out of the housing crisis, and while more money is going in, the costs of development are rising faster than sales values, which is reducing the viability of building homes.
"Building the homes the nation needs requires the implementation of the full spectrum of planning reforms, more investment in affordable homes and further demand-side support for new home buyers."
Alex Slater, Rightmove's housebuilding expert says: "Today's news is a really positive boost for the housebuilding industry and a step in the right direction. There aren't enough affordable homes, so we welcome any initiatives that will help the sector to deliver more of these homes to market.
"What will be key is making sure more affordable homes are delivered in the right places, where the gap in supply and demand is greatest. Hopefully, this is one of many steps to come to support the delivery of much-needed homes across the country."
Ben Beadle, Chief Executive of the National Residential Landlords Association, said, “Today’s spending review does nothing to tackle the immediate pressures in the private rented market.
“It does nothing to support the delivery of the one million new private rented homes needed by 2031 to meet growing demand. It does nothing to support and encourage investments in energy efficiency works to rental properties.
“And it does nothing to support all those renters struggling to find a home as a result of the Government’s freeze on housing benefit rates.”
Timothy Douglas, Head of Policy and Campaigns at Propertymark, comments, “Investment in rejuvenating places up and down the country is welcome and ensures that people live, work and want to move into vibrant communities.
"Propertymark also welcomes additional funding for affordable and social homes as we know this will help meet the UK Government’s ambitious housing target and have the knock-on effect of bringing down the cost of renting in the private rented sector.
"Planning reforms must also work alongside a housing strategy which is much anticipated to be published by the UK Government to ensure we are building the right homes in the right places, and we can meet housing need up and down the country.”
Matt Hutchinson, director at flatshare site SpareRoom, comments, “This sort of long-term thinking and investment is exactly what’s needed. For too long, we’ve spent the vast majority of our housing budget paying people housing benefits, which just keeps rents high.
“This spending commitment should mean a gradual reduction in the amount spent on housing benefit and, most importantly, a reduction in the number of people forced to rely on it,"
“Of course, housebuilding takes time. In the short term, we’d like to see more creativity in how we use the UK’s existing housing stock because people are suffering right now. Over the past seven years, UK room rents have increased by 31%, largely due to lack of supply, but there are an estimated 26 million empty bedrooms in owner-occupied properties in England alone,"
“We also need a firm commitment from the Government to prioritise homes over holiday lets. We have a housing crisis, not a hotel room crisis, so incentives for landlords to rent to long-term residential tenants are key to balancing supply and demand.”
Nick Jones, the mortgage sales and marketing director for Access FS, said, “It’s tempting to focus on the big-ticket announcements around housing – and there was certainly some good stuff in there on Homes England and social housing. But while everyone’s dazzled by the sexy stuff, Angela Rayner’s been very publicly battling to protect day-to-day funding settlement for her department, the Ministry for Housing, Communities and Local Government (MHCLG). She has been right to."
"While that funding is not in the spotlight, cuts there could have a major knock-on effect for levels of resourcing in local government planning support. So, while it might not grab the headlines, I’m worried reductions in local government budgets could hobble planning functions. Planning delays and under-resourced local authorities have been holding back the UK’s property market for too long – and this could make the situation worse.”
Trowers & Hamlins LLP head of real Estate, Suzanne Benson, says, "The scale of the Government’s £39 billion commitment to social and affordable housing funding, combined with the certainty of a 10-year rent settlement, provides a real opportunity for growth across both the new homes sector and for wider regeneration. It has the potential to stimulate house building across the tenures and should provide a platform for creative partnership working between the private and public sector."
Places for People group CEO Greg Reed said, “Government has made real progress on housebuilding over the past year and today marks a major moment in our sector’s recent history. The bold package announced by Treasury on Wednesday will be truly transformative for Customers and Communities,"
“A decade-long rent settlement brings much-needed certainty for our sector, encouraging long-term investment and enabling sustainable financial planning. Alongside a new expanded Affordable Homes Programme, this will drive real momentum to meet the Government’s 1.5 million homes target,"
“We also welcome the Government’s consultation on social rent convergence and believe that even more can be done to further strengthen the sector’s financial capacity,"
“As a trusted partner of Homes England, last year we delivered over 2,000 affordable homes and are committed to maintaining this momentum. These new measures show that the Government recognises our sector’s vital role in its Plan for Change, and we’re ready to deliver.”
Elle Cass, chartered town planner and head of strategic built environment growth at SLR Consulting, said, “£39 billion is no small fee, it’s the single biggest commitment in today’s Spending Review and marks a clear shift in tone from the government. Compared to the last administration, this represents almost a 50% uplift in annual affordable housing investment. It shows real intent, a willingness to borrow for growth, and an understanding that stimulus is essential, something the US proved in the wake of the last financial crisis,"
"But while the funding headline is positive, there are clear gaps. There’s still no dedicated social housing grant to allow registered providers to acquire or build genuinely affordable homes. That’s a missed opportunity.
"We urgently need a national housebuilding programme, led by council housing, to meet demand, just as we did post-war. That requires structural reform, including serious investment in planning skills. Scrapping funding for Level 7 planning apprenticeships, for example, is a backwards step at exactly the wrong time,"
"Raising social rents by 1% above inflation, as reported, is also deeply concerning. At a time when private rents are already unaffordable for many, that kind of increase risks pushing more people into hardship,"
"This is a major investment and a welcome signal of intent, but without structural changes, council-led delivery, and proper workforce planning, it risks falling short. We can’t just pump money in, we need the system ready to deliver. And we mustn’t forget industrial and logistics infrastructure either, they’re the foundation of a resilient economy and must be part of the conversation.”
Jonathan Pearson, director at Residentially, said, “This new funding delivers the clearest signal yet that the Government understands the scale of the challenge facing the country’s affordable housing providers. The housing associations I work with have always stressed that they stood ready to scale up their efforts in line with the Government’s own ambitions, but they first needed to know how much money was available and how it would be allocated. Today’s announcement goes a long way towards answering that call.
“While we’re still awaiting further clarity around how and when this funding will be allocated, they can at least begin to plan multi-phase schemes, secure land, and mobilise supply chains with confidence and at the pace required to help meet the 1.5 million-homes target. Not-for-profit housing associations are also forced to make every penny count when it comes to the number of new homes they can afford to take on, so longer-term certainty on rent is also going to be important when it comes to their developing their plans.”
Nick Sanderon, CEO at Audley Group comments, “With difficult decisions having to be made, today’s £39bn commitment to affordable housing is good news. But, while the government commits to housing investment for generations to come, it’s still turning a blind eye on the potential of specialist retirement living properties.
“The Government can’t afford to ignore the sector's ability to encourage downsizing, free up supply, and create movement up and down the ladder - all positive benefits that were outlined in the cross-party Older People Housing Taskforce recommendations published late last year.
“People living in properties that suit their needs, which can adapt as they get older, would also deliver a significant positive impact to the NHS and social care services, both of which are on the government’s ‘to fix’ list with funding boosts announced today.
“Housing has a huge role to play in the wellbeing of generations to come, and right now, that isn’t being recognised.”
