On the 11th June 2025 the UK government announced, in the long-awaited Spending Review, a 10-year rent settlement, a £39bn Affordable Homes Programme (AHP), and a consultation on rent convergence.
This is a huge win for the Housing sector, with this being the biggest investment in social and affordable housing we’ve seen in decades. The government has given a clear signal that they have listened to the sector, and made affordable housing a top priority moving forward.
Chancellor Rachel Reeves stated “a plan to match the scale of the housing crisis must include social housing”, as she unveiled their plans for house building in the UK.
So what was exactly said in this Spending Review, and what have been the reactions from the sector?
What was announced in the Spending Review for Housing?
In her speech to the House of Commons, the Chancellor announced several new changes that impact the future of social housing. Alongside the £36 billion AHP and the 10-year rent settlement, she also confirmed that the government has reviewed the ‘green book’ rules.
This means that the Treasury can prioritise projects outside of London and the South East, with the introduction of ‘place-based business cases’.
The government will also scrap a 200-year-old law that makes rough sleeping a criminal offence in England and Wales. By spring next year, the 1824 Vagrancy Act will be abandoned and more financial support will be provided to help tackle homelessness.
As well as this, a total of £950m will be pumped into the fourth round of the Local Authority Housing Fund (LAHF). This funding was confirmed by the government to be for supporting “local authorities in England to increase the supply of good-quality temporary accommodation and drive down the use of costly bed and breakfasts and hotels”.
The government announced plans for “community help partnerships”, supported by £100 million, aimed at uniting various services to enhance support for adults in crisis and reach vulnerable individuals sooner, preventing issues from worsening.
Here’s a summary of all the key points from the Spending Review:
- £39bn for a new 10-year Affordable Homes Programme.
- A 10-year rent settlement under which annual rents increase by CPI plus 1%.
- A consultation on rent convergence.
- £2.5bn in low interest loans for social housing providers to boost their development capacity.
- An additional 10 billion pounds for financial investments, to be delivered through Homes England.
- £950 million of investment for the fourth round of the Local Authority Housing Fund.
- A re-commitment of £13.2bn to the Warm Homes Plan.
- £100 million, including from the Transformation Fund, for early interventions to prevent homelessness.
- Investing in up to 350 deprived communities across the UK, to “fund interventions including community cohesion, regeneration and improving the public realm”.
- MHCLG has identified £50 million of technical efficiencies by 2028-29, to be delivered through workforce and digital reform.
There are still questions remaining surrounding whether this new funding aligns with Labour’s original target of 1.5 million homes by 2029, and there is understandable scepticism about the government’s capabilities on delivering all they have promised.
Nonetheless, this Spending Review provides essential support for social housing providers, demonstrating that during challenging periods, the government is focused on prioritising housing needs.
What are the reactions from the sector?
There was a clear consensus across the sector, with many viewing this as a historic turning point for Housing.
Kate Henderson, chief executive of the National Housing Federation, said “this is a transformational package for social housing and will deliver the right conditions for a decade of renewal and growth.”
She added that “Housing associations look forward to working in partnership with the government and with a deputy prime minister who has tirelessly championed social housing.”
Nicholas Harris, chief executive of Stonewater, stated that “it is hugely reassuring to see long-term funding for affordable homes of £39bn”, and that this Spending Review “gives us much greater financial stability and certainty, which will be vital when planning our long-term investments and goals.”
He added, “we sincerely hope that the government stands by this settlement to provide much-needed certainty for the sector.”
Gavin Smart, chief executive of the Chartered Institute of Housing, said of the announcement: “this represents a near-doubling of the previous programme, and sends a strong signal about the government’s commitment to tackling the housing crisis”.
Matt Downie, chief executive of Crisis, described the decision as “a landmark moment that will change lives and prevent thousands of people from being pushed into the shadows, away from safety”.
To see more reactions from the sector, we recommend this article from Inside Housing.
It’s clear from the sector reaction that this has been a long-awaited review for Housing, and there is great excitement that the government has committed itself to a long-term plan, ensuring the first steps in fixing the housing crisis.
How Convene Can Help Your Housing Association
Housing Associations play an invaluable role in providing quality homes and creating communities. That’s why we’re proud of how many have chosen Convene to help fulfil their social purpose of housing people.
Here at Convene, we have over 200 clients in the Housing Sector, and we are dedicated to helping them achieve that all too important long-term stability.
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We want to facilitate discussion and wisdom sharing for our Housing community and beyond. We’ll be hosting events, webinars & sharing our articles and newsletters and more, all focused on Housing Governance, Risk and Compliance.
We’ll also be at Housing Governance 2025, and we can’t wait to discuss with you the governance issues that are facing the sector.
