Families currently residing in temporary accommodation or languishing on housing waiting lists will soon benefit from the initial funding allocation from the government’s ambitious £39 billion Social and Affordable Homes Programme. This initiative is set to transform housing availability, marking a significant revival in council housebuilding not seen in decades.
On 25 August, the Prime Minister, alongside Secretary of State Angela Rayner, announced nearly £10 billion in funding aimed at constructing thousands of high-quality council, social, and affordable homes across England. This first round of funding will facilitate the creation of over 70,000 homes by distributing resources to 33 Strategic Partners, including councils and housing associations that have secured long-term funding agreements. This announcement signifies a critical step towards re-establishing large-scale council housebuilding.
Empowering Local Councils in Housing Development
In collaboration with housing associations, councils will now be granted Strategic Partner status with Homes England, placing them back at the forefront of housebuilding efforts. It is anticipated that approximately 60% of the homes produced through these partnerships will be designated for Social Rent, the most accessible form of rental housing, thereby enabling more families to secure stable homes.
With nearly 180,000 children growing up without a permanent residence, the government is prioritising local councils in addressing the housing crisis. Prime Minister Andy Burnham emphasises that no child should endure the instability of hostel living or wait a decade for their own front door. He stated, “Everything starts with a good home,” reinforcing the need for immediate action to provide families with the security they deserve.
Burnham further highlighted that nearly £10 billion will be allocated to councils and housing associations to construct genuinely affordable homes, particularly in regions where the demand is highest. “Councils have previously delivered the country out of housing crises, and with proper backing, they can do so again,” he affirmed.
Addressing the Urgency of Affordable Housing
Angela Rayner, Secretary of State, echoed this sentiment by stating that families should not have to raise children without a place to call their own, nor should anyone be forced to wait years for safe and affordable housing. Drawing from her own experiences, Rayner underlined the importance of a secure home as a foundation for a better life, reinforcing the government’s commitment to rejuvenating council housebuilding.
In addition to the substantial funding, over £2 billion is expected to be directed towards Mayoral areas outside London. Through the government’s broader devolution agenda, established Mayoral Strategic Authorities will guide the programme’s strategic direction within their jurisdictions, ensuring that investments align with local needs and priorities. It is anticipated that as the programme evolves, further funding will be allocated directly to these mayoral authorities, moving decision-making away from central government.
A Long-Term Commitment to Housing Development
Today’s funding allocation represents merely the initial phase of a ten-year programme, with more than £16 billion left to be distributed beyond London. The ongoing focus will be on prioritising Social Rent homes and the expansion of council housebuilding, aiming for the most significant growth in this sector in decades.
Amy Rees, Chief Executive Officer at Homes England, remarked that this announcement marks a pivotal moment in the rollout of the £39 billion Social and Affordable Homes Programme. Through strategic partnerships and ongoing market engagement, Homes England aims to unlock thousands of essential homes throughout the country.
Furthermore, today’s funding package will assist councils in maximising the available resources from the programme, utilising Right to Buy receipts—totaling £1.61 billion from the previous financial year—and other funding sources. To support this initiative, the government is investing an additional £46 million over the next three years to enhance councils’ skills, expertise, and capacity for ambitious housebuilding projects.
Boosting Housing Development in London
The housing crisis in London is set to receive a significant boost, with the Greater London Authority planning to allocate at least £6 billion through the programme. Councils are expected to deliver over half of the homes funded in the capital, showcasing the effectiveness of local leadership in managing housing investments and delivery.
Mayor Sadiq Khan reiterated that addressing the housing crisis remains a top priority. Despite record numbers of council homes being constructed in London, the ongoing plight of families and children without a permanent home remains unacceptable. He expressed a desire to collaborate with the new government to dramatically increase the number of council homes in the city.
The Vital Role of Housing Associations
Housing associations will continue to be instrumental in delivering the social and affordable homes needed across the country. They, alongside councils, will be key players in achieving the government’s goal of increasing housing availability and expanding access to genuinely affordable options.
Kate Henderson, Chief Executive of the National Housing Federation, welcomed the confirmation of this long-awaited funding, which is essential for kickstarting construction on tens of thousands of urgently needed social homes. She highlighted the significant role that not-for-profit housing associations play in serving the long-term interests of their communities.
Housing associations have demonstrated their commitment to meeting government ambitions by working collaboratively with various stakeholders, leveraging support to rebuild their development capabilities, and investing in their existing properties. This is evident in the ambitious proposals submitted for the Social and Affordable Homes Programme.
A Vision for Housing Accessibility
The government’s package builds upon its commitment to deliver 1.5 million homes during this parliamentary term, representing the most substantial enhancement to council, social, and affordable housing in a generation. Gavin Smart, Chief Executive at the Chartered Institute of Housing, expressed appreciation for the allocation of funds from last year’s Spending Review, which will empower Strategic Partners to transform commitments into tangible homes that will significantly benefit families.
As councils prepare to participate actively in this revival of social housebuilding, the allocation of the initial phase of the £39 billion fund and the enhanced Capacity to Build funding reflect a positive trajectory towards achieving these objectives. With mayors working closely with local authorities, the aim is to optimise the impact of this financial support, ensuring councils continue to have access to favourable borrowing rates to enhance project viability.
Commitment to Sustainable Housing Solutions
The Social and Affordable Homes Programme (SAHP) represents a £39 billion investment initiative over the next decade, with a target that at least 60% of the homes delivered will be designated for Social Rent. The programme’s first major funding wave has allocated £9.58 billion to 33 Strategic Partners outside London, enabling the construction of 73,600 new social and affordable homes across England over the next ten years, predominantly for Social Rent.
As the programme unfolds, Homes England will manage the SAHP outside London, ensuring that Section 106 agreements remain a crucial mechanism for delivering social and affordable housing alongside grant-funded initiatives. The funding will facilitate councils in retaining and reinvesting proceeds from Right to Buy sales, further supporting the development of new social and affordable homes.
In summary, the government’s strategic direction for the Social and Affordable Homes Programme aims to prioritise Social Rent and council homes while enhancing local decision-making and delivery processes. As the programme progresses, it is expected to foster a collaborative approach among councils, housing associations, and local authorities to meet the pressing housing needs of communities across the country.