The Chancellor of the Exchequer, Rachel Reeves, reiterated the government’s pledge to build 1.5 million new homes in her Spring Statement, delivered today.
She pointed to the news that up to 18,000 new social and affordable homes will be built with a £2 billion injection of investment.
It follows the government’s promise to train 60,000 construction workers to tackle skills shortages and get more young people into jobs.
The Chancellor said the £2 billion investment 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.
The government claims that “thousands” of new affordable homes will start construction by March 2027 and will complete by the end of this Parliament. The government is trying to encourage providers to come forwards as soon as possible with projects and bids to ramp up the delivery of new housing supply.
Reeves said: “We are fixing the housing crisis in this country with the biggest boost in social and affordable housebuilding in a generation. [This] 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.”
TANGIBLE ACTION NOW REQUIRED
Paresh Raja, CEO of Market Financial Solutions, said: “Overturning outdated parts of government to improve efficiency has been a major focus for Labour since the election, and planning reform was raised again as a key part of this agenda. However, the ‘get Britain building’ rhetoric must now translate into tangible action – bringing in new construction workers is a positive step, as the Chancellor had already announced three days ago, but much of today’s speech involved repeating the Autumn Budget’s plans to encourage housebuilding.
“Reforming the planning system is obviously important. However, investors and developers are unlikely to commit to new projects unless they see a strong and growing economy that provides long-term confidence and a return on their investment. The OBR forecasts were a blow in this regard, and the onus must now be on turning the corner to turbo-charge GDP growth.
“House prices are rising, inflation fell in February, and the base rate is expected to come down further this year. These are all positives, highlighting that the property market remains bouyant, and this is important given how significant the sector’s contribution to GDP is. In future statements and budgets, we need the Chancellor to focus more energy on supporting homebuyers and borrowers, which will further stimulate growth in the market.”
TOP-UP WELCOMED
Kate Henderson, chief executive at the National Housing Federation, added: “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.”
