The UK government has announced a £39 billion plan over ten years to build 1.5 million affordable new homes.
This big spending promise, part of the Chancellor’s latest review, is being called the “biggest boost to social and affordable housing in a generation.”
However, many will be watching closely to see if this huge investment actually fixes Britain’s long-standing housing crisis and makes homes truly affordable for families.
‘This is about building for Britain’s future’
Chancellor Rachel Reeves described the investment as a “generational reset” in British housing policy, signalling an end to short-termism in government planning.
The £39 billion Affordable Homes Programme will run through to 2034 and represents the first time in modern memory that housing investment has been locked in over a full decade.
“This is about building for Britain’s future,” Reeves said in her address to Parliament. “Every family deserves the security of a decent home – and every builder, council and housing association deserves the long-term backing to make that happen.”
The plan will focus on areas with the largest supply-demand gaps and aims to support councils and housing associations in delivering genuinely affordable homes – both for rent and purchase. Funding will also be directed toward modernising housing stock and upgrading energy efficiency.
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Housing industry welcomes Spending Review – with conditions
The reaction from the housing sector was largely positive, with industry figures welcoming the scale and certainty of the commitment while calling for smart implementation.
Alex Slater, Rightmove’s housebuilding expert, commented: “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.”
Climate and retrofit leaders also welcomed the package, with Will Walker, UK Policy Lead at Ashden, praising the complementary investment in green energy and housing: “This gives UK SMEs and supply chains the certainty they need to scale up. Upgrading 5 million low-income households while empowering communities with home-grown energy means lower bills, better living standards and real momentum behind Britain’s economic renewal.”
However, others urged the government to go further. Russell Smith, Director of retrofit specialists Cotality, warned: “We still need bold policy on incentives – like stamp duty rebates, minimum efficiency standards and tailored advice – if we want to build the market needed to sustain this scale of retrofit.”
What else is in the Spending Review?
The housing commitment came as part of a wider economic blueprint, with infrastructure, energy and regional regeneration among the big winners:
- Transport: £15.6 billion was allocated to local transport in England’s city regions, with another £2.3 billion for other areas.
- Energy: Plans for energy security include £14.2 billion for the Sizewell C nuclear plant, £2.5 billion for small modular reactors and £9.4 billion for carbon capture.
- Neighbourhood renewal: 350 communities will benefit from long-term regeneration funding through the new “Plans for Neighbourhoods” initiative, targeting graffiti, fly-tipping and economic revitalisation.
- Warm Homes Plan & GB Energy: The government confirmed it will stick to its £13.2 billion commitment to retrofit millions of low-income homes and £8.3 billion to establish GB Energy, helping to create cleaner, more affordable energy from the local level up.
Ashden’s Reg Platt, CEO of solar retrofit firm Emergent Energy, applauded the dual approach to tackling bills and emissions: “The government is right to focus on cutting costs while driving clean energy. The Spending Review sets the stage – now it’s about delivery.”
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