Chancellor goes big on affordable homes with £39bn commitment

Billed as the biggest investment in discounted homes in a generation, the financial firepower Reeves has given to registered providers is perhaps the clearest indication yet that Labour is serious about solving the housing crisis.

Rachel Reeves is expected to announce a £39bn package of grant funding to turbocharge the delivery of affordable homes over the next 10 years at today’s spending review.

Registered providers have consistently called for an enhanced long-term settlement to help it build new homes and refurbish old ones and it appears as if their prayers have been answered.

As well a doubling of grant funding, the government also intends to allow social landlords to raise rents one percentage point above inflation, according to media reports.

“The sector will be pleased with this announcement,” said Emma Richman, director of operations at Peaks and Plains.

“£40bn worth of grants to be spent over 10 years for local authorities, private developers and housing associations is a major increase on the previous programme.”

She added that the ability to increase rents would “help us deliver the housing targets and invest in aged stock”.

The funding, part of Reeves’ £113bn capital investment pot, is being made available through increased borrowing after the chancellor tweaked the UK’s fiscal rules.

The boost in grant funding follows Labour’s overhaul of the planning system, which is also aimed at increasing housing delivery.

Richard Beresford, chief executive of the National Federation of Builders, said: “Rachel Reeves is backing up her planning reforms with the funding required to build the social and affordable homes the nation so desperately needs.

“This is a significant step in the right direction and demonstrates that both the Prime Minister and chancellor have a long-term plan to fix the housing crisis and are not afraid to share the limelight for the good of the nation.”

Bronwen Rapley, chair of Homes for the North, said: “With this increase in funding for the Affordable Homes Programme and long-term rent settlement we can support the more and better homes needed in our region while also investing in repairing, improving and decarbonising existing homes.

“With this spending review settlement, we can fast-track the development of affordable, sustainable homes, breathe new life into communities, and help drive the inclusive growth the government rightly champions. We look forward to continuing our work to turn these ambitions into lasting change for the North.”

John Bowker, chair of JV North, said: “After many years of campaigning, it is very pleasing to see housing so high up the political agenda which is where it should be given everything stems from having a good, warm, secure home.

“Ultimately, meeting the housing crisis and building homes en masse requires significant financial investment and this is exactly what government has recognised and acted on. The challenge from government is now clear and JV North will doubtless rise to it – we delivered
over 10,000 homes in the past decade and need to achieve a similar number once again.

“The 10-year programme effectively means continuous market engagement bidding which will negate, as much as is possible, volatile market conditions such as inflationary build cost pressures. This, along with certainty and a long-term plan, will cascade through the sector giving boards confidence to approve schemes at a time when financial viability is under heavy scrutiny.”

JV North members are Cobalt Housing, Cheshire Peaks &; Plains Housing Trust, L&Q Housing Trust, Muir Group Housing Association, One Manchester, Plus Dane Housing, South Liverpool Homes, Southway Housing Trust, Stockport Homes Group, Stockport Council, Sovini Group, Torus, Weaver Vale Housing Trust and Wythenshawe Community Housing Group.