Affordable homes being delivered, Homes for the North, p Cavendish

Homes for the North estimates that the region will need to build 2m affordable homes by 2050 to reach its economic potential. Credit: via Cavendish

Govt unveils social housing reform progress

29 January 2026 10:49 Julia Hatmaker Comments (0)

Rent convergence, a social housing taskforce, Section 106 changes, a low-interest loan system, and minimum energy efficiency standards were the major headlines behind the Ministry of Housing, Communities, and Local Government’s announcement yesterday.

The news builds upon MHCLG’s commitment in July to deliver 300,000 affordable homes by 2036. Of those 300,000; 180,000 are to be for social rent.

The government’s announcements in brief

Rent convergence – a highly anticipated policy that will allow registered providers to increase weekly rent for social rent properties that are below the ‘formula’ rent level. RPs will be permitted to add up to £1 onto weekly rents each year from 1 April 2027 and then £2 from 1 April 2028 until formula rent is reached
Time-limited approach being introduced for uncontracted Section 106 units, enabling them to be swapped to a different tenure should no registered provider want to purchase them
Improved guidance for S106 homes, including clear rules regarding quality and a push for standardisation on pricing
Dropping of Housing Revenue Account requirement for councils building less than 1,000 homes – previously you had to create and operate an HRA if you built more than 200
£2.5bn to be made available through low-interest loans. Of these, 60% will be allocated to London, with the rest of the country bidding for the remaining 40%. Up to 10% of these loans will be available for purchasing S106 homes.
Decent Homes Standard has been updated for the first time in 20 years to prioritise safety, warmth, and energy efficiency – with special attention paid to addressing damp and mould
Minimum energy efficiency standards that will require social landlords to upgrade homes to achieve an EPC rating of C by 2030

What this means for the North

The news was welcomed by Homes for the North, an organisation comprised of 17 housing associations in the North. Together, these groups provide homes for more than a million people and have ambitions to deliver 43,000 homes over the 10-year period ending in 2033.

Homes for the North chair Bronwen Rapley was especially supportive of the rent convergence announcement, which she said would help housing associations deliver the 2m residences required by 2050 to meet the area’s need – as well as upgrade the estimated 130,000 homes that require refurbishment in the North.

“Rent convergence, done carefully, can help address long‑standing funding imbalances and give social housing providers the capacity to invest in homes and communities, while protecting tenants from unaffordable rises,” Rapley said.

“This is especially important in the North, where Homes for the North’s research shows the region faces a chronic shortage of housing. Our region’s significant viability challenges linked to low land values and higher remediation costs on brownfield sites constrain providers’ ability to invest without stable, long‑term funding mechanisms.”

However, there was one part of the government’s announcements that drew Rapley’s concern.

“Homes for the North members stand ready to support the government’s housing ambitions, and we could do even more with a more equitable split of low interest loan funding,” she said.

“In this package 60% has been allocated to London, while the entire rest of the country will need to compete for the remaining 40%. Homes for the North doesn’t dispute the acute housing need in London, but viability challenges in the North also mean this additional funding could be pivotal to get developments off the ground and deliver the same number of homes.”

She continued: “Homes for the North want to underline the scale of regeneration now needed. Many communities are starting from a legacy of under‑investment, and our modelling shows the region will require 2 million new homes by 2050 to unlock its economic potential – far beyond simply upgrading what already exists.

“This demonstrates that improving quality and fairness must go hand in hand with sustained funding and robust policies to renew neighbourhoods and deliver new homes, not just refurbish current stock.”

Paul Dolan, group chief executive of Liverpool-headquartered housing association Riverside, welcomrd the moves as giving the sector some long-term assurance.

He said: “It is positive government has listened to the sector on our need for long-term certainty and the announcements today will help to further ramp up investment in new and existing homes.

“Rent convergence is essential for enabling social landlords to sustainably increase capacity to deliver both more new homes and increase investment in existing homes for customers and communities over the long-term. Whilst rent convergence will not be introduced until next year, it is important that future administrations retain convergence until rents equalise as this ensures fairness.”

Dolan continued: “From a new-build perspective we are particularly pleased to see government announcing £2.5bn in loans at 0.1% interest so social landlords can deliver more homes.

“We welcome the government introducing a new Decent Homes Standard and coupled with the Minimum Energy Efficiency Standards will raise the quality and create safer, warmer homes.

“The new Decent Homes Standard has an important role to play in unlocking landlords’ wider plans to regenerate estates and renew neighbourhoods so that the standard helps to create stronger and more cohesive communities as we improve homes.”