Chancellor reveals £39 billion to build more affordable rental homes

Published on 16th June 2025, 6:02am

The Chancellor has revealed £39 billion to drive a significant increase in the number of affordable homes being built across the country over the next ten years.

Presenting her Spending Review to parliament this lunchtime, Rachel Reeves revealed the “greatest cash injection in affordable and social housing in fifty years”.

The key thrust of this is a new Affordable Homes Programme into which the government is to pour billions over the next decade which will be direct Government financial support for house building and in particular homes available via social rent.

Her comments follow calls for just such a huge increase in affordable and social rent house building from many quarters including both lobbying organisations such as Shelter and Generation Rent, but also industry bodies Propertymark and the National Residential Landlords Association, in recent times.

Affordable

All have pointed out that the ongoing imbalance between demand and supply in the private rented sector has been created to a large extent by tenants who would normally live in social and affordable housing being forced to seek homes from private landlord and letting agents.

Reeves also revealed the towns where the first developments to benefit from the new Affordable Homes Programme will be – Blackpool, Preston, Sheffield and Swindon.

HM Treasury, following her speech, said: “This significant settlement represents the first time in living memory that the government has set out a programme that provides ten years of certainty – giving the sector the confidence to deliver for now and for the future of housing in Britain and turning the tide on the housing crisis in this country”.

Industry reaction

Dr Neil Cobbold, Commercial Director of global proptech specialists, Reapit

“It is encouraging to see the Chancellor commit £39bn to deliver affordable housing over the next 10 years,” he says.

“The investment in training and apprenticeships for builders and electricians is also welcomed, along with £10bn for Homes England.  We hope these funds will help build the 1.5 million new homes the government has committed to delivering over this parliament.

“However, it is disappointing to see no additional funding outlined for the civil courts and tribunal system, which need long-term investment, especially with the Renters’ Rights Bill due to see more tenants and landlords in court and tribunal cases in the following years.”

Alex Slater, Rightmove’s housebuilding expert

“Today’s news is a really positive boost for the housebuilding industry and a step in the right direction,” he says.

“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.”

William Reeve, CEO of Goodlord

“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,” he says.

“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.”

RICS CEO Justin Young

“This is a significant and welcome announcement from the Government. For too long, the housing sector has lacked the long-term certainty needed to plan and deliver at scale,” he says.

“RICS has consistently called for an increase in public investment to match the ambition of building 1.5 million homes, and this 10-year programme does just that.

“We now need to ensure this ambition translates into action, with the right enabling conditions in place from a well-resourced planning system to a skilled a workforce. RICS and our members are ready to support the delivery of high-quality, affordable homes for communities across the UK.”

Andy Jones, Group Director of Corporate Sales, Lettings & BTR at LRG:

“The considerably increased funding for affordable housing is welcomed and will help provide a boost to new homes and affordable housing development,” he says.

“But from a property investment perspective I feel that the Chancellor has missed an opportunity to tackle the development viability crisis which is another important part of the jigsaw.

“Without urgent intervention to tackle the real-world constraints choking housing delivery, particularly in Build to Rent (BTR) and regen schemes, government ambitions will remain out of reach.”

Timothy Douglas, Head of Policy and Campaigns at Propertymark 

“Investment in rejuvenating places up and down the country is welcome and ensures that people live, work and want to move into vibrant communities,” he says.

“Propertymark also welcomes additional funding for affordable and social homes as we know this will help meet the UK Government’s ambitious housing target and have the knock-on effect of bringing down the cost of renting in the private rented sector.

“Planning reforms must also work alongside a housing strategy which is much anticipated to be published by the UK Government to ensure we are building the right homes in the right places, and we can meet housing need up and down the country.”

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