Chancellor Rachel Reeves has just delivered her Spending Review, setting out budgets for government departments, including housing.
The flagship announcement was that of a new affordable homes programme will be launched, supported by a £39bn cash injection.
She insisted that working people in the country must have the security of a proper home.
“Our planning reforms have opened up the opportunity to build now we must act to make the most of the opportunities,” Reeves said.
According to Reeves, this must include social housing, which she says has been neglected by too many decades.
“We are taking action,” she added.
Industry reaction:
Jonathan Pearson, director at Residentially, said: “This new funding delivers the clearest signal yet that the government understands the scale of the challenge facing the country’s affordable housing providers. The housing associations I work with have always stressed that they stood ready to scale up their efforts in line with the Government’s own ambitions, but they first needed to know how much money was available and how it would be allocated. Today’s announcement goes a long way towards answering that call.
“While we’re still awaiting further clarity around how and when this funding will be allocated, they can at least begin to plan multi-phase schemes, secure land, and mobilise supply chains with confidence and at the pace required to help meet the 1.5 million-homes target. Not-for-profit housing associations are also forced to make every penny count when it comes to the number of new homes they can afford to take on, so longer-term certainty on rent is also going to be important when it comes to their developing their plans.”
William Reeve, CEO of Goodlord, commented: “We welcome the announcement that the government plans to double spending on affordable housing – the immediate bump to housebuilder share prices that followed the chancellor’s speech is testament to how this is being received across the industry. This £40bn commitment could not come a moment too soon.
“The myriad pressures on the housing market – from rising rents and retreating landlords, to crumbling social properties and escalating numbers living in temporary accommodation – all of it stems back to a historic failure to ensure our housing stock keeps up with population growth. We need to focus all efforts on driving up the number of homes available and close a gap that’s been rising year-on-year.
“Today’s funding commitment is a key announcement for the market and includes other much needed reforms such as a sensible step forward on social rents and £10bn for financial investments. The big hope is that this money, combined with planning reforms, will see the OBR’s forecast – that house building will hit its highest level in over 40 years by 2029/30 – come to fruition.”
Alex Slater, Rightmove’s housebuilding commentator, said: “Today’s news is a really positive boost for the housebuilding industry and a step in the right direction. There aren’t enough affordable homes, so we welcome any initiatives that will help the sector to deliver more of these homes to market. What will be key is making sure more affordable homes are delivered in the right places, where the gap in supply and demand is greatest. Hopefully this is one of many steps to come to support the delivery of much needed homes across the country.”
Emma Humphreys, partner, Charles Russell Speechlys, noted: “Given the recent dip in new homes receiving approval, there are serious concerns about an even tighter housing supply. Serious change is needed but it is unclear whether the proposed additional government spending will achieve that – given the continuing obstacles to development and absence of any government support for first-time buyers. There is also the consistent issue of what “affordable housing” means and whether it will really give families the homes they need.”
Emma Joy Smith, social housing partner at law firm, Shakespeare Martineau, said: “The social housing sector has been overlooked for too long, but an injection of £39bn into the Affordable Homes Program over the next 10 years could be the starting point for real, long-lasting change. With waiting lists recently revealed to be over 100 years in some areas of the UK, there is still a long road ahead and a lot of work to be done. The government needs to ensure that this investment doesn’t also come with more cumbersome bureaucracy so that housing associations can hit the ground running.
“The announcements today should be celebrated and give certainty and direction to a sector that has been left to stagnate for too long. The need to build affordable homes goes beyond just meeting a target, it changes lives. The ability to put down roots, become part of a community and live in safe, high quality affordable housing helps individuals, cities and the country flourish. The UK will reap the benefits of today’s announcement for years to come.”
Elle Cass, chartered town planner and head of strategic built environment growth at SLR Consulting, said: “£39bn is no small fee, it’s the single biggest commitment in today’s Spending Review and marks a clear shift in tone from the government. Compared to the last administration, this represents almost a 50% uplift in annual affordable housing investment. It shows real intent, a willingness to borrow for growth, and an understanding that stimulus is essential, something the US proved in the wake of the last financial crisis.’
“But while the funding headline is positive, there are clear gaps. There’s still no dedicated social housing grant to allow registered providers to acquire or build genuinely affordable homes. That’s a missed opportunity. We urgently need a national housebuilding programme, led by council housing, to meet demand, just as we did post-war. That requires structural reform, including serious investment in planning skills. Scrapping funding for Level 7 planning apprenticeships, for example, is a backwards step at exactly the wrong time.
“Raising social rents by 1% above inflation, as reported, is also deeply concerning. At a time when private rents are already unaffordable for many, that kind of increase risks pushing more people into hardship.
“This is a major investment and a welcome signal of intent, but without structural changes, council-led delivery, and proper workforce planning, it risks falling short. We can’t just pump money in, we need the system ready to deliver. And we mustn’t forget industrial and logistics infrastructure either, they’re the foundation of a resilient economy and must be part of the conversation.”
Mike Haywood, CEO of Property Sense, added: “Understandably, there appears to be a revitalised focus on affordable housing in the Chancellor’s Spending Review, but that should not take away from the vital role that BTR continues to play in addressing the UK’s housing challenges.”
“BTR delivers professionally managed rental homes designed to meet the needs of today’s renters – offering stability, community, and modern living standards. There must be investment and incentives for BTR developments, not just for owner-occupied housing. This is the only way to build back a balanced housing market that offers secure, high-quality rental options, particularly given these properties are in greater demand than ever before.”
“Ultimately, it’s about giving people real, viable options for secure housing – whether that’s buying or renting – and building a housing ecosystem that works for everyone.”
Read the orginal article: https://propertyindustryeye.com/breaking-property-industry-reacts-to-reevess-spending-review/
