The UK Government’s Spending Review plays a pivotal role in shaping the delivery of affordable housing across the country.
As a fiscal policy tool, the Spending Review outlines departmental budgets and public expenditure for multiple years, directly influencing capital investment in housing programmes.
For affordable housing providers, local authorities, and developers, the outcomes of the Spending Review determine the scale and certainty of funding streams such as the Affordable Homes Programme (AHP) and infrastructure grants. In turn, this affects the number of homes that can be built, the types of tenure that can be offered, and the ability to meet long term housing demand.
Understanding the mechanics and impact of the Spending Review is essential for anyone working in housing policy, finance, or delivery.
As Chancellor Rachel Reeves unveiled her spending plans, reaction filtered in from the sector.
On the 10-year rent settlement, Steve Partridge, Director and Head of Affordable Housing Consultancy at Savills said:
“The government has listened to the calls of the housing sector, delivering more support for social and affordable housing and starting to address the housing crisis.
“A 10-year rent settlement at CPI +1% is a positive move. It’s a step towards meeting the challenge of building 1.5m homes in England, providing stability in the event of any future political change and confidence for housing providers and investors to commit to increasing the supply of new affordable homes.
“This stability encourages private capital investment, backing recent research from Savills that 150,000 homes would be owned by For-profit providers by 2030, with a quarter of this being social rent.
“It also provides confidence for local authorities to increase their role in the delivery of new social and affordable housing; if we are to deliver the homes we need, local authorities will need to play an increasing role.”
Addressing the £39bn investment for AHP:
“The significant £39bn investment for the Affordable Homes Programme, over an extended period of 10 years, will make great strides towards tackling the housing crisis.
“It will provide funding for local authorities, housing associations and for-profit providers to increase their stock through development, taking up affordable housing allocation and buying up dormant homes.”
Jonathan Higgs, Chief Executive of housing association Raven Housing Trust, responding to the Government’s renewed £39bn commitment to housebuilding and infrastructure:
“Today’s Spending Review represents a landmark shift for housing. The government’s commitment to invest £39bn over the next decade, along with the framing of affordable housing as a core part of national renewal, is a bold and welcome step forward. It sends a clear signal that housing is not just a social priority, but an economic and environmental one too.
“For organisations like Raven, this provides the long-term confidence needed to plan, invest and deliver at greater scale – whether that’s building new affordable homes, retrofitting existing stock to meet net zero, or supporting communities to succeed.
“With rising demand for affordable housing in areas like Surrey and Sussex, today’s announcement creates new possibilities – notably more stable grant funding and the potential for longer-term rent-setting arrangements, which could unlock greater borrowing capacity to reinvest into homes and services.
“But ambition alone won’t build homes. There are still real risks to delivery. To make the most of this investment, we need a planning system that is faster and more responsive, a construction workforce that has the skills and scale to meet demand, and clarity on how funding will be distributed across the country. The 1.5 million homes target is a big ask – and without the right structure behind the investment, there’s a risk we fall short…”
The chief executive of Bradford-based Manningham Housing Association has backed the Chancellor’s commitments to a £39 billion Affordable Homes Programme and a 10-year rent settlement announced in today’s Spending Review.
In a statement, Lee Bloomfield said:
“For far too long, housing associations have faced an impossible task in trying to provide enough decent homes for those who need them with insufficient Treasury support.
“The Chancellor’s decision to increase spending on the Affordable Homes Programme from £2.3 billion a year to £3.9 billion a year and extend the length of the scheme from five years to 10 years delivers resources to build many more properties and offers greater financial stability for the sector.
“Similarly, the 10-year rent settlement which will see social housing rents rise by CPI plus 1% annually, allows housing associations to plan ahead with much greater confidence…”
Sarah Jones, Chief Executive at Anchor added:
“We are pleased to see the Government’s commitment to affordable housing and look forward to a bold, deliverable national housing and planning strategy which should have a clear and urgent focus on homes for older people.
Increasing the supply of homes for older people is essential to meet growing demand and to enable more people to live well and independently for longer. We look forward to working with the Government to ensure future delivery meets the needs of our ageing population as part of the forthcoming housing strategy.
Alongside the 10-year investment in affordable housing, the CPI+1% rent settlement and the consultation on rent convergence are welcome milestones and ones Anchor have been calling for. They provide greater certainty and confidence needed to boost investment in both new and existing homes, enabling providers to plan effectively and deliver high-quality, age-appropriate housing that our communities urgently need.
We urge Government to allocate at least 10% of Homes England’s capital funding specifically to homes for older people, alongside a mirrored commitment within local housing strategies. This would help unlock much-needed supply, enabling older people to live well and independently in homes that meet their changing needs…”
