The UK’s housing crisis has reached a critical point with over 1.2 million people on social housing waiting lists. Homelessness and temporary accommodation placements are at record highs with a family becoming homeless approximately every 8 minutes in the UK. The lack of affordable homes also continues to drive up rents and cost-of-living pressures, particularly for low-income families.
A Recap of Recent Funding Announcements:
- Interim boosts earlier this year (February 2025). £350 million was injected in February 2025 for 2,800 homes, being £300 million for the Affordable Homes Programme and £50 million for much needed council housing.
- Immediate Investment of £2 billion (March 2025 Spring Statement). Designed to allow the delivery of up to 18,000 new social and affordable homes by end of this Parliament. It aims to kickstart construction quickly on “shovel-ready” sites, particularly in cities such as Manchester and Liverpool, in desperate need of housing.
- 10-year £39 billion affordable housing programme (June 2025 Spending Review). Part of the Chancellor’s June 2025 Spending Review promises a £39 billion investment over the next decade to build 1.5 million homes. A strong policy signal showing the Government’s strategy to address housing supply shortages, homelessness, and rising private rents.
- Introduction of the National Housing Bank. As a subsidiary of Homes England, this will be a publicly owned alternative source of funding, providing a wide range of debt, equity and guarantee products to support homebuilders across the sector and accelerate homebuilding. It will reportedly be backed by £16 billion of financial capacity, on top of £6 billon of existing finance to be allocated this Parliament. It’s hoped to leverage in £53 billion of additional private investment, create jobs, work cohesively with local authorities and help deliver over 500,000 new homes.
This funding aims to:
- Reverse years of underinvestment in social housing.
- Reduce reliance on expensive temporary accommodation.
- Provide secure, affordable tenancies that reduce poverty and improve lives holistically.
What It Means:
Short-term results: The £2 billion injection ensures building now.
Long-term ambition: The £39 billion ten-year plan offers funding continuity and aligns with the goal of 1.5 million homes – supporting both social rent and affordable pathways.
Criticisms: Many worry the current boosts don’t match the scale needed to tackle the housing crisis with such scarily high rates of homelessness and drastic housing shortages. The amounts may also be less generous than it first appears as fiscal watchdogs argue the headline figures inflate hopes too much given the back-loading means the most significant investment won’t kick in until post-2029.
Positives: Seemingly not just empty promises! The National Housing Bank is set to provide the previously announced low-interest loans to help support the delivery of more social and affordable housing and recent funding provides not only a vital boost to the sector but the largest social housing investment in 50 years.
Opportunity for Housing Associations:
The government’s renewed commitment to social and affordable housing is both a response to the housing crisis and a strategic opportunity for housing associations. While many challenges remain, such as planning delays, availability of appropriate land, and back-loaded funding, the current policy landscape offers the most stable environment for social housing delivery in decades. This allows for greater financial predictability, enabling associations to expand development strategies beyond the immediate horizon.
Housing associations that act quickly – leveraging available funding, fostering partnerships, and embracing innovative construction – will be at the forefront of addressing the UK’s housing emergency.