As part of our ongoing commitment to providing you with everything you need to know about the UK property market, we’re exploring the Spending Review 2025 and its implications for the property sector.
Now that the dust has settled on Chancellor Reeves' Spending Review for this year, it's clear that the big winner is affordable housing.
In what's been described as the 'largest cash injection into social housing in 50 years', the Chancellor presented plans for a 10-year programme that would see £39 billion invested into affordable housing between now and 2036, peaking at £4 billion a year from 2029.
Aside from being the first ever 10-year grant programme, these new plans also effectively double the level of annual grant funding - a clear indicator that this government is serious about its pledge to build 1.5 million new homes.
According to Timothy Douglas, Head of Policy and Campaigns at Propertymark, "Investment in rejuvenating places up and down the country is welcome and ensures that people live, work and want to move into vibrant communities.
“Planning reforms must also work alongside a housing strategy, which is much anticipated to be published by the UK Government to ensure we are building the right homes in the right places, and we can meet housing needs up and down the country.”
There's no doubt that this type of programme will transform the social housing market, providing developers, housing associations and, most importantly, homebuyers with much more confidence going forward.
Rent Settlement & Homes England Designation
Alongside the news around the new programme, the Chancellor also detailed plans to implement a 10-year social housing rent settlement at 1% above inflation, starting from 2026.
This not only provides housing associations with more certainty, but ensures that developers also have more room to explore, expand and ultimately, ensure more homes enter the market.
Alongside this news, the Chancellor also highlighted how Homes England would be designated a public financial institution, meaning they would have an additional £10 billion designed to 'unlock more homes'.
All in all, this is extremely welcome news and shows that the Government is prioritising housing, just as it pledged in the run-up to the election.
That said, it'll be important to see how effectively this money is invested and allocated. Likewise, many experts argue that it's also still critical for planning reform to change, especially as we head towards 2029, where the amounts being invested will be significantly higher than they are today.
