“The biggest cash injection to social and affordable housing in 50 years”, was announced by Chancellor Rachel Reeves in Wednesday’s Spending Review.
As she promised to allocate £39 billion over the next 10 years to build affordable and social housing, the Chancellor said “a plan to match the scale of the housing crisis must include social housing.”
The money will form part of a new Affordable Homes Programme to support house building, especially for social rent.
Speaking in the House of Commons, the Chancellor also announced that “hundreds of thousands of new homes” would be built using an additional £10 billion allocated for financial investments including those to be delivered through Homes England.
The Labour Government pledged to build 1.5 million new homes in its election manifesto, and Ms Reeves has been under pressure to allocate the funding to reach these targets.
Last week, Florence Eshalomi, Chair of the cross-party Housing Committee, said that the review would be “make or break for the 1.5 million target” in an open letter to the Chancellor.
Ahead of the review, Sir Sadiq Khan warned that a “generation of Londoners” risk being priced out of the capital unless the government prioritises affordable housing in the city.
There had been growing speculation that Ms Reeves would snub London in her spending plans, instead allocating funds to other areas of the country.
Ms Reeves said she was pleased to report that towns and cities including Blackpool, Preston, Sheffield and Swindon already have plans to bring forward bids to build new houses.
The Chancellor also confirmed that the Government is reviewing its green book spending rules, which will allow the Treasury to spend more money on projects rejuvenating towns across England.
Ms Reeves said concerns had been brought to her by MPs and Liverpool mayor Steve Rotheram. She said the government would overturn generations of underinvestment in areas outside London and south-east England.
"Increased investment in affordable housing is vital to support the ambitions to build 1.5 million homes,” says Richard Donnell at Zoopla.
"The nation can't spend its way out of the housing crisis and while more money is going in, the costs of development are rising faster than sales values which is reducing the viability of building homes.
“Building the homes the nation needs requires the implementation of the full spectrum of planning reforms, more investment in affordable homes and further demand side support for new home buyers."
Energy efficiency in homes
In its manifesto, Labour pledged a £6.6 billion “Warm Homes Plan” to support energy efficient upgrades to properties like solar panels, batteries and low carbon heating.
Ms Reeves confirmed today: “I will deliver in full our manifesto commitment to upgrade millions of homes.” She stated that the upgrades would save families and pensioners across the country up to £600 off their bills.
