The UK’s housing sector stands on the cusp of a new era of delivery. The government’s recent ambition to deliver around 300,000 new social and affordable homes is welcome, with £39bn pledged over the next decade, a 10-year rent settlement, and the creation of a new National Housing Bank all signalling a renewed commitment to tackling one of the country’s most pressing challenges.
These commitments follow sustained calls from across the housing sector – including from Lloyds Banking Group – for decisive action.
Over the past several years, we and many others have urged the government to set out a long-term approach to housing, backed by meaningful investment and reform. Many of the building blocks are now in place, and so the focus must shift to delivery, with the private sector and registered providers helping to turn ambition into reality.
The scale of the challenge is stark. Over 165,000 children in England alone are in temporary accommodation, and social housing construction has fallen to historic lows – with affordable housing starts dropping by 39 per cent in the past year and by 92 per cent in London alone. A generation of young people, families and individuals are being denied the stable foundation needed to build secure, fulfilling lives at home and work. Changing this will require turning policy into delivery at pace, and at scale.
At Lloyds, we believe business has a critical role to play. Since 2018, we’ve provided over £20bn in support to the social housing sector alone. And we’re going further: transforming our own legacy estate, including former offices and data centres like Pudsey in Leeds, into new social housing; working with our charity partner Crisis to end homelessness with homes; and partnering with the Prince of Wales’ Homewards initiative to enable smaller, specialist housing providers to help those who need it most.
Addressing these challenges is not only a moral imperative, it also presents a powerful economic opportunity. The £39bn commitment to affordable housing goes beyond social investment, serving as a significant economic stimulus and a powerful way to generate growth.
When people have a secure, affordable home, they are better able to work, save, and provide for their families, creating wealth and opportunity for themselves and their communities. The ripple effects of housing investment are felt across construction, finance, retail and public services. It empowers individuals and families, and strengthens the economy.
To turn commitments into action, we believe three things should now happen, each critical to unlocking delivery at scale.
First, we need to build on the momentum already underway in cities and regions across the UK to unlock more housing projects. We are increasingly seeing local and combined authorities acting as convenors, bringing together housing associations, developers, investors and communities to form delivery coalitions.
With Bristol, Sheffield and Lewisham, work has started to deliver the “Small Sites Aggregator” – a concept developed through Lloyds Banking Group’s Social Housing Initiative – that will package together small parcels of brownfield land into single, investable projects on which homes will be built. There are other great examples from cities and regions across the country that show the potential for creative collaboration.
The next step is to scale these models, with central government and financial services firms providing the tools, flexibility and ambition to support delivery that is locally responsive and nationally consistent.
Second, we must address the growing reliance on temporary accommodation. In 2023-24, councils in England spent over £2.3bn on temporary housing, often on provision that is costly and does not provide the long-term certainty people need to thrive. A new wave of private sector-led investment could help.
One idea worth exploring is a national vehicle, funded primarily by private capital, to acquire and refurbish underused homes for use by local authorities. This could reduce costs, improve housing quality, and create a pipeline of homes that could later transition into permanent social housing. Addressing this challenge now is critical to avoid it becoming a long-term feature of the UK’s housing system.
Third, we need targeted policy reform to unlock further investment and delivery. This means building on the government’s announcements to date and ensuring housing remains a viable, attractive proposition to commercial investors.
Using the UK’s new fiscal framework to crowd in private capital, providing income guarantees to make social housing projects more viable, and using benefits savings from moving people from the private rented sector to social housing to build new homes – these are all practical, achievable steps. Planning reforms, investment in skills, and support for local authorities so they have the capacity they need to develop and run housing programmes at scale are also critical.
The UK’s housing challenge is complex. But progress is possible. With the right leadership, policy and partnerships, together we can deliver the most significant expansion of social and affordable housing in decades – with a lasting impact on communities across the UK.
Charlie Nunn is the CEO of the Lloyds Banking Group.
The Independent’s Brick by Brick campaign, in partnership with Refuge, is helping to build innovative, safe homes that welcome survivors of domestic abuse. All donations received will be spent on Refuge’s lifesaving work housing survivors of domestic abuse, and help to rebuild lives, brick by brick.
The national domestic abuse helpline offers support for women on 0808 2000 247, or you can visit the Refuge website. There is a dedicated men’s advice line on 0808 8010 327.
