9:52 AM, 12th June 2025, About 4 weeks ago 8
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The government announces the biggest boost to investment in social housing in 50 years but critics warn more needs to be done to support the private rented sector.
The Chancellor, Rachel Reeves, announced in the spending review a £39bn funding boost for social housing.
However, critics argue the Spending Review fails tenants and lacks incentives for landlords.
The Chancellor announced a new Affordable Homes Programme, which she says will get an investment of £39bn in the next decade.
Ms Reeves told Parliament: “We’re turning the tide against the unacceptable housing crisis in this country with the biggest boost to social and affordable housing investment in a generation, delivering on our commitment to get Britain building.
“I’m proud to announce the biggest cash injection into social and affordable homes in 50 years.”
The Treasury has also confirmed a new 10-year rent settlement that will permit social rents to increase by the Consumer Price Index plus 1% a year.
The government also plans to consult on bringing back rent convergence, a policy social housing providers have been pushing for. The policy would help align rents across different homes by allowing lower rents to rise more quickly.
The National Residential Landlords Association (NRLA) warns the Spending Review fails to support the private rented sector.
Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “The 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.”
Matt Hutchinson, director at flatshare site SpareRoom, welcomes the increased funding in social housing but warns that incentives for landlords are still missing.
He said: “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 benefit, 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.
He adds: “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.”
Dr Neil Cobbold, commercial director of Reapit, warns the Spending Review failed to fund court investment, leaving courts unprepared for the abolition of Section 21.
He said: “It is encouraging to see the Chancellor commit £39bn to deliver affordable housing over the next 10 years. The investment in training and apprenticeships for builders and electricians is also welcomed, along with £10bn for Homes England. We hope these funds will help build the 1.5 million new homes the government has committed to delivering over this parliament.
“However, it is disappointing to see no additional funding outlined for the civil courts and tribunal system, which need long-term investment, especially with the Renters’ Rights Bill due to see more tenants and landlords in court and tribunal cases in the following years.”
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David Nichols
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Sign Up10:07 AM, 12th June 2025, About 4 weeks ago
All those proposed social homes financed with borrowed money for our kids to pay for. Current 20yr govt gilt borrowing yields are 5.22%.
All those new properties will have to be constantly maintained and managed. It doesn't look good value for money but whilst they continue the war on private landlords, they have little choices to house the vulnerable and new arrivals.
Beaver
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Sign Up10:22 AM, 12th June 2025, About 4 weeks ago
I'm guessing it costs about £150,000 to build a 3 bed home in UK. So would an investment of £36 billion equate to about 240,000 homes to be provided over the next decade? I.e. not now?
If you had a problem with sufficient residential accommodation now, surely you'd want to involve landlords in the solution; and you wouldn't want to be penalising them because in the end it's tenants who would suffer for that.
And how will they determine eligibility for this limited supply of social housing?
Fred M BARRETT
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Sign Up12:17 PM, 12th June 2025, About 4 weeks ago
The new deal is for affordable housing at 80% of market rental. Not so much as a word given for social housing. There can be a big difference between affordable and social
Gromit
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Sign Up12:21 PM, 12th June 2025, About 4 weeks ago
"The National Residential Landlords Association (NRLA) warns the Spending Review fails to support the private rented sector."
Of course, they won't, this Govt and the previous few Tory Govts have wanted to the destroy the PRS.
Beaver
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Sign Up12:24 PM, 12th June 2025, About 4 weeks ago
Reply to the comment left by Fred M BARRETT at 12/06/2025 - 12:17
It does all look a bit like smoke and mirrors. The Guardian probably ought to have some idea of what it's all about.
ttps://www.theguardian.com/politics/2025/jun/10/rachel-reeves-to-unveil-39bn-housing-boost-in-spending-review-shake-up
They just said:
"Reeves will...allocate £39bn to the affordable homes programme for 10 years from 2026-36, to be paid for by the extra capital spending she has freed up by changing the government’s borrowing rules.
Reeves will also announce a decade’s worth of social rent increases, alongside a consultation on how to ensure that the cheapest rents rise to meet the most expensive ones.
The extra money will help housing associations buy up thousands of new units that have already been built by private developers as part of their affordable housing commitments, but which are sitting empty because associations cannot afford them."
Reluctant Landlord
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Sign Up12:41 PM, 12th June 2025, About 4 weeks ago
Reply to the comment left by Fred M BARRETT at 12/06/2025 - 12:17
sshhhh don't mention that. They want to keep the word 'affordable' out of it...
They need to be 'seen' to be doing something about housing...nothing about how much social housing this equates to even if this is where the biggest need is...
Reluctant Landlord
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Sign Up12:43 PM, 12th June 2025, About 4 weeks ago
Reply to the comment left by Beaver at 12/06/2025 - 10:22...and you have to get past the planning fiasco before a spade gets in the ground. Where to build? Section 106 will scupper all that - look at the effect it is already having...
Beaver
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Sign Up14:07 PM, 12th June 2025, About 4 weeks ago
Reply to the comment left by Reluctant Landlord at 12/06/2025 - 12:43My understanding of section 106 decisions are that they are drafted when it is considered that a development will have significant impacts on the local area that cannot be moderated by means of conditions attached to a planning decision. And the most common obligations include:
Affordable housing
Improvements to play areas
Improvements to public open spaces
Improvements to playing pitches and sports facilities
Flood mitigation
I am not really sure how that is going: Around where I live planning authorities have short memories and are still trying to build on flood plains. From some of the applications that I see getting through you would struggle to convince me that the planning authorities know what they are doing. Public open spaces also seem to be under threat by developers...planning officers seem to be letting developers build on them rather than creating public open spaces.
With respect to Rachel Reeves announcement, if the Guardian is correct, a number of developers have built affordable housing (presumably to comply with section 106 obligations) that housing associations cannot afford and so Rachel Reeves is volunteering future tax payers money to pay for that by changing the borrowing rules.
I cannot see this announcement by Rachel Reeves delivering 1.5 million new homes. Unless you were a government that was ideologically opposed to it I cannot see why you would not want the market to be part of the solution to the problem. Of course, the market is going to struggle to be part of the solution to building new homes because this government has raised the minimum wage and employers NI and is introducing more measures to make it more risky to employ people. I also cannot see any capital allowances on the horizon for measures that would increase local energy security, unless I've missed something.