Prime Minister Sir Keir Starmer claimed the £39bn announced in the Spending Review to help build social and affordable housing over the next 10 years, would be transformational for homeownership.
In PMQs just minutes before Chancellor Rachel Reeves Spending Review, the PM said.
“We are turning the tide on the housing crisis with the biggest investment in social and affordable housing in a generation, with the Chancellor investing £39bn over the next 10 years – almost double what we saw from the last government.”
He added: “No wonder the National Housing Federation has welcomed this move as transformational and offering real hope for those needing safe, secure and affordable homes.”
A government source told the BBC that this investment would help Labour hit its target of building 1.5 million new homes by 2030.
In her Spending Review speech, the Chancellor told the House that affordable and social housing had been neglected for decades and that the new investment represented the: “Biggest cash injection into affordable homes in 50 years.”
The proposal are confirmed in the Spending Review, it will be viewed as a win for Housing Secretary and Deputy PM Angela Rayner – who like all ministers had been hoping for a boost rather than a cut to funds.
On the BBC Today programme, Institute for Fiscal Studies (IFS) director Paul Johnson also pointed to the importance of “big increases” in capital investment – specifically funding for infrastructure, and new schools, hospitals and roads all integral to any large-scale new housing projects.
In her speech, the Chancellor confirmed an extra £15bn to help connect cities and towns – including new train stations, mass transit projects and airports – with Doncaster namechecked.
Reeves also pledged £1.2bn a year for training and upskilling to support those industries in need of apprentices and skilled labour.
Commenting on the proposed spending, Market Financial Solutions chief executive Paresh Raja, said: “The £39bn investment in affordable and social housing is hugely positive news. If more homes are to be built across the UK, funding and policy must go hand in hand; for all the talk of planning reform, and the use of AI in improving the planning process, there’s no escaping the fact that significant investment is required.
He added: “Amidst concerns that Labour’s promises of tackling the housing crisis would amount to little, this announcement could signal a notable step forward. Government investment will encourage activity from the private sector, injecting fresh life into the housebuilding industry.”
Rics chief economist, Simon Rubinsohn, commented:“RICS welcomes this week’s announcement of the government’s commitment to a longer-term affordable housing settlement. This should provide greater certainty and support more strategic delivery.”
He added :“The creation of a new housing finance vehicle via Homes England is also a potentially important step in boosting supply, particularly if it improves access to funding for smaller developers. Together, these measures could help address the UK’s chronic supply shortfall and support broader economic stability.”
“Importantly, today’s announcements also build on the planning reforms announced earlier in the year, reported to be assessed as adding £6.8bn to the economy. These new policies highlight the wider economic gains that could flow from an overall better functioning housing market.”
