Six key details you need to know about major house funding change
Chancellor Rachel Reeves has announced £39billion of investment in a new 10-year Affordable Homes Programme - here's everything you need to know about the scheme
Rachel Reeves has announced a bombshell £39billion cash injection for affordable and social homes.
Delivering her Spending Review in the Commons, the Chancellor said she wanted to ensure people had the "security of a proper home". She said it was a plan to meet the "scale of the housing crisis".
Ms Reeves announced a new 10-year Affordable Homes Programme, which will see £39bn of investment over the next decade. She said it was the biggest increase in half a century.
She made the commitment in the Spending Review, which sets government departments' budgets for future years, as she promised to "invest in Britain's renewal". It comes as Keir Starmer pushes to meet Labour's manifesto pledge to build 1.5 million homes by the next election.
When the plan was first unveiled last night, campaigners said the plan was 'transformational' and could help reverse decades of neglect. Here's a take a look at what the plans could mean for you.
READ MORE: Rachel Reeves Spending Review LIVE - Affordable housing change and NHS bombshell
What has been announced?
In her Spending Review, Rachel Reeves announced substantial increases in capital investment. Capital spending relates to long-term projects such as infrastructure and roads.
Among the headline figures, the Government is providing £39billion for a new 10-year Affordable Homes Programme. It means hundreds of thousands of new affordable homes will be built over the next decade.
Ms Reeves told the Commons: "Led by (Housing Secretary Angela Rayner), we are taking action. 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 £39billion over the next decade."
Why is it necessary?
England is facing a huge housing emergency, with millions of people unable to access vital housing.
There are 1.3 million households stuck on social housing waiting lists in England, a rise of 10% in the last two years. Some 20,560 social homes were lost in 2023/24, primarily through Right to Buy sales and demolitions, while 19,910 were delivered - meaning a loss of 650 social homes.
In the Commons, Ms Reeves said social housing had been "neglected for too many decades, but not by this Labour Government".
What is the Affordable Homes Programme?
The current Affordable Homes Programme (AHP) has been running from 2021 and had been due to end next year. The scheme allocates grant funding to Local Authorities and Housing Associations to help support the capital costs of developing affordable housing for rent or sale.
The new AHP will run for a decade - so double the length of the current one. Plus, the funding announced by Rachel Reeves for the new scheme far exceeds the amount previously committed by the Tories. The Treasury said Labour's plan would see annual investment in affordable housing rise to £4billion by 2029/30, almost double the average of £2.3billion between 2021 and 2026.
Who will benefit?
Delivery of the current AHP programme is delegated to the scheme's delivery partners Homes England (HE) and the Greater London Authority (GLA).
Councils can bid for grant funding to support the delivery for affordable homes. Funding is given on a case-by-case basis. AHP funding supports rental accommodation, homes for ownership and homes in rural settlements and supported housing for older, disabled or vulnerable people.
Ms Reeves told the Commons some areas already have plans to put in bids for affordable homes to be built in their region. She said: "Direct Government funding that will support housebuilding especially for social rent and I am pleased to report that towns and cities including Blackpool, Preston, Sheffield and Swindon already have plans to bring forward bids to build new houses."
Is there more help for the housing crisis?
Alongside the affordable homes announcement, the Government will also address high home energy costs by improving energy efficiency through the Warm Homes Plan. The plan will help to cut bills for families by upgrading homes through insulation, heating and solar panels.
A ten-year social rent settlement will set a rent policy for social housing from 2026 that enables providers to borrow and invest in new and existing homes, while also protecting social housing tenants. It will see rents rise at CPI inflation + 1% from 2026.
Money for homelessness and rough sleeping has been protected in the Spending Review, while £100million, including from the Transformation Fund, for early interventions to prevent homelessness.
What do experts say?
Campaigners last night hailed the £39billion announcement. Kate Henderson, chief executive of the National Housing Federation, said: 'This is a transformation package for social housing and will deliver the right conditions for a decade of renewal and growth."
Mairi MacRae, director of campaigns and policy at Shelter, said: 'This increased investment is a watershed moment in tackling the housing emergency. It's a huge opportunity to reverse decades of neglect and start a bold new chapter for housing in this country."
While there was praise, it was warned that building social homes must be a priority within the new AHP. Currently, various types of housing fall under the 'affordable homes' umbrella, including shared ownership, affordable rent, social rent, first homes
Research by Shelter, a homelessness charity found that the current AHP had delivered over 74,000 grant-funded affordable homes by March 2024. Only around 11,000 - just 15% - of these were genuinely affordable social rent homes.
Housing campaigner Kwajo Tweneboa said: "This announcement has potential - but without clear social housing targets, it risks becoming another promise that won't deliver change for the children and families who need it most."
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There are two things I learned in maths at school: the square of the hypotenuse is equal to the sum of the square on the other two sides, and how to write my name in numerals on a calculator. You may think that's not much to show for 11 years of effort in trying to put numbers into a brain that only ate words. But knowing how triangles work is a damned useful thing when looking at the world and working out where it's gone wrong. And the more I see of her, the more it looks like Rachel Reeves' triangle expertise starts and ends with knowing it'll go 'ting' if you hit it with a teaspoon. For those who read only headlines, the first Chancellor to not have the same colour hair from one day to the next has announced £113bn of investment, building back what's been destroyed, restoring people's faith in Labour, and blah de blah blah. 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But in reality, it's still West Bromwich, the business died for lack of traffic, and everyone grew up living too close to the paint factory. So when Rachel's sunny little plan says HM Revenue and Customs will save 13.1% of its budget through "AI and automation", what will happen is that even less effort will be made to go after tax dodgers, and the process of small business owners and the self-employed getting shafted annually will be commentated by a chatbot. The sort of blithely dysfunctional customer service that will leave you actually pining for a keypad options menu, and a recipe for cock-ups. Rachel said departmental budgets will grow by an average of 2.3%, aside from all those which will be cut. The NHS will get an extra £29billion, and she'll promptly take a chunk back in employer National Insurance contributions for 1.3m staff, which she'll then say she's 'reinvesting' in the NHS. Even spotting some of that cash as it whizzes around in theoretical space and time will be like trying to catch a quark in your hands in the Large Hadron Collider. Then she had the brass neck to call it "a record cash investment in our NHS, increasing real-terms, day-to-day spending by 3%". Except under Tony Blair it increased by £60bn, over the entire lifetime of the NHS it's been 4% a year, and in those days we could actually see it. No mention of dentists, not a sniff of social care. Defence spending has squeaked up merely by changing what you count as 'defence', and is already too low for what the rest of NATO wants. Disabled people rendered more disabled, and less able to work, by a programme of punishing them into work rather than giving bosses an incentive to hire them. A huge £39bn for 'affordable' housing that probably won't be, with a construction industry 250,000 people short of actually being able to build them. A u-turn on winter fuel payments because of a changed economic outlook when the economic outlook has actually got worse. And hooray, a triumph for the Mirror's campaign to extend free school meals to every family on Universal Credit. Except - have you seen a school meal recently? We're talking damp pizza, cold gravy, the cheapest of miserable chickens that even Donald Trump would feel guilty about selling to us. All this hoo-hah about how a hot meal improves learning and life chances, and nary a thought about how reheated, reformed offcuts from the cheapest bidder for the off-site catering contract can possibly qualify as food. You'd get more nutrition from licking the playground. If it weren't so far beneath her, school catering could be Michelle Mone's next big wheeze. And the asylum seekers. The ones who can't work, because that right was taken away last time Labour were in power and saw votes in naked racism. The homeless who can't have social housing, because the Tories sold it all and Angela Rayner bought as much as she could. The people who get £49 a week to feed, heat, and clothe themselves, while living in 'hotels' six to a room or detention centres crawling with cockroaches, while the owners bill the taxpayer five star rates. Well, no more hotels for them! Can it be coincidence, I wonder, that on the same day it was announced rough sleeping would be decriminalised? No need to house them, and no need to sweep them up and put them in the jails we don't have. Heaven forfend anyone'd have a good idea, like allowing them to work and pay taxes, so they could house themselves, integrate, and everyone benefits. In Rachelworld, all the asylum seekers are going to just disappear - pouf - as the world plummets headfirst into climate crisis and authoritarianism. 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