A HUGE boost for building more home was announced in today’s spending review by Rachel Reeves.
The Chancellor today unveiled a £39billion 10-year plan to build more social and affordable housing across the UK, alongside a new rent policy for social housing starting in 2026.
The multi-billion pound investment will be distributed among local authorities, private developers, and housing associations to help deliver 1.5million new homes and address the housing crisis.
This funding is a major increase compared to the previous affordable housing programme, which allocated £11.5billion over five years (2021–2026), or £2.3billion annually.
By the end of this Parliament, the government plans to almost double yearly spending on affordable housing to £4 billion by 2029/30.
The £113billion increase in capital spending announced today will be funded through extra borrowing, made possible by changes to fiscal rules earlier this year.
Reeves told MPs: “I am proud to announce the biggest cash injection into social and affordable housing in 50 years.
“A new Affordable Homes Programme – in which I am investing £39bn over the next decade.
“Direct government funding that will support housebuilding… …especially for social rent.”
A government source added: “We’re turning the tide against the unacceptable housing crisis in this country with the biggest boost to social and affordable housing investment in a generation, delivering on our commitment to get Britain building.”
What’s happening to social rents?
The government is also introducing a ten-year plan for social housing rents starting in 2026.
This policy will allow housing providers to raise rents by inflation plus 1% (CPI+1%) each year, helping them secure funding to invest in building new homes and maintaining existing ones.
At the same time, a consultation will soon be launched to explore how to make rent levels fairer across social housing.
This plan aims to balance investment in housing with protecting social housing tenants from excessive rent increases.
The previous Conservative governments made similar promises of long-term rent hike formulas in the early 2010s but often failed to follow through.
For example, David Cameron‘s coalition set a 10-year rent settlement in 2012 based on the retail price index plus 0.5%.
However, then-Chancellor George Osborne later imposed four years of below-inflation increases to reduce housing benefit costs.
More recently, Johnson’s government announced a five-year settlement of CPI plus 1% in 2020 but had to cap rent increases at 7% due to a surge in inflation.
Most social housing tenants receive full housing benefits from the government, meaning taxpayers often fund any social rent increases.
However, around 30% of social tenants pay full rent and will be hit by future increases in full because they’re not eligible for support.
There are around four million households currently living in rented social housing.
That means 1.2million households will face future bill hikes with the new 10-year formula.
However, the exact amount your rent will increase will depend on where you live and how big your property is.
Help available for social renters
IF you rent from the council or a housing association, you can get help if you’re having problems affording your rent.
If you miss a rent payment, you’ll fall into ‘arrears’ and owe your council or housing associations.
Fail to pay back what you owe and you could be evicted.
If you can’t afford your next rent payment, you should talk to your landlord as soon as possible.
Call them and explain why you’re struggling.
Your landlord may be able to grant a temporary payment holiday or signpost you to other forms of help.
It’s worth asking if you can get a discretionary housing payment.
This provides extra money from your local council to help pay your rent – you don’t need to pay it back.
It’s always worth checking if you’re getting any benefit payments you’re entitled to.
You can use several free calculators, such as Gov.uk, Citizen’s Advice, MoneySavingExpert, StepChange, and Turn2Us, to help you get an estimate.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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