The chancellor has delivered her Spending Review, announcing a raft of new day-to-day budgets for government departments.
The review contained positives for the housing industry, with Reeves announcing almost double the funding for the Affordable Homes Programme compared to its previous version, with £39billion to be provided over the next 10 years.
The government will also introduce a new 10-year rent settlement that will permit social rents to increase by the Consumer Price Index plus 1% a year. The industry has long called for an increase to the government’s original five-year proposal.
The review also said that the government will consult on how it can reinstate rent convergence, which has been long called for by social housing providers. This policy would ensure better alignment between rents on different properties, allowing cheaper rents to be raised more quickly.
Here’s how the Spending Review was received by the housebuilding industry:
Places for People Group CEO, Greg Reed, said: “The government has made real progress on housebuilding over the past year and today marks a major moment in our sector’s recent history. The bold package announced by the treasury on Wednesday will be truly transformative for customers and communities.”
“A decade-long rent settlement brings much-needed certainty for our sector, encouraging long-term investment and enabling sustainable financial planning. Alongside a new expanded Affordable Homes Programme, this will drive real momentum to meet the government’s 1.5 million homes target.”
“We also welcome the government’s consultation on social rent convergence and believe that even more can be done to further strengthen the sector’s financial capacity. These new measures show that the government recognises our sector’s vital role in its Plan for Change, and we’re ready to deliver.”
Olivia Harris, CEX of affordable housing provider, Dolphin Living, commented: “The significant increase in investment to unlock more affordable housing, along with measures to provide greater long-term certainty to the sector through the ten-year rent settlement, are clearly very welcome. Taken together they will enable affordable providers to increase delivery. However, as ever the devil is in the detail and we need to ensure that much of this investment is directed towards London, where the need is most acute, and it is most expensive to deliver new affordable housing. In addition to funding, we need to see greater flexibility on affordable tenure, not just social rent, to ensure that local housing needs are met, and viability can be improved to unlock previously stalled schemes.”
Paul Rickard, chief executive of Pocket Living, said: “The measures announced today by the chancellor are very welcome, especially the additional financial investments available to Homes England allowing enhanced financial support for our struggling SME housebuilding sector, alongside increased flexibilities within that funding allowing us to innovate together. This is a very positive step forward following other recent measures to support SMEs which we have been working closely with the government on.”
“The announcement of a ten-year £39billionn affordable housing funding and rent settlement also provides much-needed clarity and capacity for the housing sector which should see a step change in the delivery of affordable housing. We hope to see greater flexibility on affordable tenure to improve viability and address local housing need on a site-by-site basis and to ensure that the positive work to improve the planning system and support our SME housebuilders is most effective, MHCLG, Homes England and local authorities will still need the day-to-day financial resources necessary to capitalise on the positive announcements to date.”
David Cracklen, director at AJC Group, said: “Today’s long-awaited announcement marks a once-in-a-generation opportunity to crack the housing crisis and rebuild the housing ladder for those who’ve been locked out for too long.”
“The £39billion Affordable Homes Programme and 10-year rent settlement at CPI plus 1% are a major step forward – offering the long-term certainty the sector has long called for. These measures, combined with a consultation on rent convergence, demonstrate that the government is finally treating social housing as essential infrastructure and a national priority.”
“At AJC Group, we’ve been clear that this isn’t just about building homes, it’s about building the right homes, in the right places, that people can genuinely afford. The housing ladder has all but collapsed for millions, and this programme gives us the runway to begin rebuilding it properly.”
“We strongly welcome the scale and ambition of what’s been announced, but delivery is now the real test. This is the moment for developers, housing associations and local authorities to come together and move fast. We need to make this decade of investment count.”
“These reforms will empower SME developers, councils, and housing associations to accelerate the delivery of genuinely affordable homes. At AJC Group, we’re ready to play our part, helping to deliver not just homes, but lasting opportunity and renewed hope for communities across the country.”
Wayne Douglas, managing director of City & Country, commented: “There has been a real sea change in attitudes towards housebuilding and housing delivery over the last 12 months, largely driven by the Labour Government agenda. Already great strides have been made in unblocking the planning system and in direct measures to support SME housebuilders. Now is not the time to apply the brakes, or the government risks losing the momentum that it has built so far.”
“The government needs to continue to push local authorities to approve schemes that provide much-needed homes and benefit local communities, and ultimately reducing the red tape that has restricted development for too long.”
“We also need to be far more reactive to the wider economic pressures that inhibit buyers. For the first time in decades, there is no government support in place to assist first-time buyers. Borrowing costs are still high, and stamp duty has pushed up costs for buyers. The government needs to enable reform for buyers at all levels, so that movement can take place at the top, bottom and middle of the market.”
Chris Harris, chief operating officer at Dandara, said: “Today’s Spending Review delivers much-needed long-term commitments to infrastructure and housing, offering a critical opportunity to reform the systems that underpin delivery. The £39billion investment in affordable and social housing is especially encouraging, signalling serious intent to tackle supply challenges across all tenures. For developers such as Dandara – who partner across the private, affordable, and single-family housing sectors – this provides a solid foundation for ongoing investment and collaboration.”
“However, to turn these ambitions into reality, the focus must now shift to delivery. Promising initiatives – such as deploying AI to support planning reform – will only succeed if backed by properly resourced local planning departments. Without sufficient capacity on the ground, even the most forward-thinking policies risk stalling. Chronic underfunding of local planning teams remains one of the biggest obstacles to progress, particularly for SME housebuilders navigating inconsistent and overloaded systems.”
“It is equally vital that first-time buyers are not left behind. A healthy housing market depends on movement at every level; if we are serious about boosting supply, we must also make homeownership more accessible. Measures to improve affordability, simplify financing, and broaden access to the housing ladder should stand alongside infrastructure investment as equal priorities.”
“With the right focus and follow-through, today’s announcements could lay the groundwork for a more dynamic, inclusive, and resilient housing market – one that delivers for housebuilders, buyers, and communities alike.”
Colin Brown, head of planning & development, Carter Jonas, said: “On the face of it, this is a very significant move by the chancellor to bolster the delivery of affordable housing and the sector will widely welcome it. It will help unlock sites, and aid the delivery of private housing as legal agreements typically seek to align the delivery of market and affordable housing. There remains a pressing need however to utilise some demand-side levers as well to encourage home ownership such as a return to Help to Buy. Of course, there are also ongoing concerns about local government funding and general skills availability to build the homes the country needs.”
