-
Landmark announcement part of Plan for Change to deliver security for working people by growing the economy and building 1.5 million homes.
-
£2 billion of new funding will only support development on sites that will deliver in this Parliament, getting spades in the ground quickly to build homes in places such as Manchester and Liverpool.
Helping hard working families get safe and secure homes and kickstarting economic growth are driving the government’s agenda, as the Chancellor and Deputy Prime Minister today (Tuesday 25 March) announced up to 18,000 new social and affordable homes will be built with a £2 billion injection of investment to deliver the Prime Minister’s Plan for Change.
The announcement hails a significant milestone on the government’s promise to build 1.5 million new homes whilst driving economic growth by getting Britain building again. It follows the government’s plan to inspire the next generation of British engineers, brickies and chippies, by training 60,000 construction workers to tackle skills shortages and get more young people into jobs.
The £2 billion investment boost comes as a down payment from the Treasury ahead of more long term investment in social and affordable housing planned later this year, which will provide additional funding for 2026-27 and well as for future years. This forms part of the government’s plan for tackling the housing crisis that has held working families back from the stability and security that comes with a safe roof over your head.
Thousands of new affordable homes will start construction by March 2027 and will complete by the end of this Parliament. The government is encouraging providers to come forwards as soon as possible with projects and bids to ramp up the delivery of new housing supply, in turn making the dream of home ownership a reality for more people across the country.
Today’s investment will also unlock development and opportunity on sites that are ready and waiting for spades in the ground in places such as Manchester or Liverpool.
The Chancellor announced plans on a visit to an affordable housing site in Stoke-On-Trent with the Deputy Prime Minister, working hand in hand to deliver the biggest boost to affordable and social housing in a generation.
Deputy Prime Minister and Housing Secretary, Angela Rayner said:
Everyone deserves to have a safe and secure roof over their heads and a place to call their own, but the reality is that far too many people have been frozen out of homeownership or denied the chance to rent a home they can afford thanks to the housing crisis we’ve inherited.
This investment will help us to build thousands more affordable homes to buy and rent and get working people and families into secure homes and onto the housing ladder. This is just the latest in delivering our Plan for Change mission to build 1.5 million homes, and the biggest increase in social and affordable housing in a generation.
Chancellor of the Exchequer, Rachel Reeves said:
We are fixing the housing crisis in this country with the biggest boost in social and affordable housebuilding in a generation. Today’s announcement will help drive growth through our Plan for Change by delivering up to 18,000 new homes, as well as jobs and opportunities, getting more money into working people’s pockets.
At the conclusion of the current Spending Review process on 11 June 2025, the government will announce further long-term investment into the sector in England, delivering the biggest boost to social and affordable housing in a generation.
Kate Henderson, Chief Executive at the National Housing Federation, says:
This funding top-up is hugely welcome and demonstrates the government’s commitment to delivering genuinely affordable, social housing for families in need across the country. The additional £2 billion will prevent a cliff edge in delivery of new homes, ahead of the next funding programme being announced.
Social housing is the only secure and affordable housing for families on low incomes, and the dire shortage has led to rocketing rates of poverty, overcrowding and homelessness. Investment in social housing is not only key to tackling the housing crisis, but is also excellent value for money, reducing government spending on benefits, health, and homelessness as well as boosting growth. Housing associations are ready to work with the government to deliver a generation of new social homes.
Charlie Nunn, CEO, Lloyds Banking Group said:
A safe and lasting home is the foundation for good lives and livelihoods, and we welcome this boost to building much-needed social and affordable homes. As the UK’s biggest commercial supporter of social housing, we’re working across the private, public and community sectors to help increase provision of good quality, genuinely affordable housing for those in need.
David Thomas, CEO at Barratt Redrow said:
To increase construction activity and build the homes the UK desperately needs, we need support for demand across all tenures. As well as providing more much-needed affordable homes, this welcome investment will help unlock mixed-tenure developments and to create jobs and economic growth across the country.
Stephen Teagle, Chair of The Housing Forum said:
This additional funding signals that the Government is listening to the sector and reaffirms its strong commitment to accelerating the delivery of much-needed affordable housing while driving economic growth. It represents an unprecedented intervention which, when paired with sustained, long-term investment, will be instrumental in meeting the growing demand for affordable homes.
Now, it’s up to the industry to rise to the challenge — accelerating delivery, building momentum towards the government’s target of 1.5 million new homes, and ensuring we provide the housing this country urgently needs.
Guidance
-
The majority of this funding will fall in 2026/27, but a tail of funding will cover completions of homes after this. All projects funded through this £2 billion will need to start by March 2027, and will need to finish by June 2029.
-
The funding will be made available to providers on the same terms as the Affordable Homes Programme for 2021-26, and will act as a bridge to the future grant programme to be announced at Spending Review. We will ask Homes England, GLA and bidders to prioritise homes for social rent, in line with the government’s commitment to support this tenure.
-
Full details of wider long-term and future grant investment will be announced at the Spending Review. At this point we will set out the full funding for 26/27 and beyond, to supplement this down payment of £2 billion.
