The UK government has announced a £39 billion plan to boost affordable housing over the next ten years.
Chancellor Rachel Reeves revealed the plan during the recent spending review, calling it the largest funding move for social housing in 50 years.
The plan aims to support Labour’s goal of building 1.5 million homes in five years. Reeves said £10 billion will go through Homes England to help bring in private investors. This, she explained, should unlock hundreds of thousands of new homes.
Since Labour took office last year, construction has slowed. Housing projects have dropped more than any other sector. Deputy Prime Minister Angela Rayner blamed the issue on what she called a poor legacy from the last government. She admitted the current housing goal will be tough to meet.
Experts believe the UK could miss its target by about 25% this year. One reason is the pressure on housing groups that usually buy affordable units from private builders. Rising interest rates have increased their debt costs, forcing them to scale back. A February survey from Knight Frank showed 80% of developers are struggling to find buyers for these affordable homes.
Still, the new plan promises change. By 2029–30, the government expects to spend £4 billion a year on affordable housing. That’s nearly double what it spent over the past five years. Starting next year, rent increases in social housing will be capped at the inflation rate plus 1%.
Many in the property sector welcomed the move. Justin Carty of CBRE said the funding gives the sector a much-needed boost. But he also warned that planning rules and delivery delays still stand in the way of real progress.
With this new push, the government hopes to speed up building, help more people find homes they can afford, and fix one of the country’s biggest problems.
