Govt announces £500m boost for Affordable Homes Programme

Chancellor Rachel Reeves and deputy prime minister Angela Rayner confirmed that the Budget will include funds to enable the delivery of up to 5,000 social homes, with further plans in place to reduce Right to Buy discounts and craft a five-year social housing rent settlement.

“We have inherited a housing system which is broken, with not enough homes being built and even fewer that families can afford,” said Rayner.

“This is a further significant step in our plan to get Britain building again, backing the sector, so they can help us deliver a social and affordable housing boom, supporting millions of people up and down the country into a safe, affordable and decent home they can be proud of.”

The £500m in additional funding for the Affordable Homes Programme is meant to lead to the building of 5,000 affordable homes. These would be a mix of rental and ownership properties, with an emphasis on social rent, according to a government announcement.

Other measures revealed to help bolster the number of council homes in the country include a five-year social housing rent settlement. This would cap the rents social housing providers can charge their tenants, with the rent to increase in line with the Consumer Price Index inflation figures and an additional 1%. The government said it would also consider a 10-year settlement.

The reduction in Right to Buy discounts is designed to help reduce the annual loss of council homes. In addition to decreasing the discounts, the government said it would enable councils to keep 100% of the receipts from a Right to Buy sale.

More details on the government’s housing strategy are due to be announced in the spring.

Cllr Louise Gittins, Leader of Cheshire West and Chester Council as well as the Local Government Association chair, welcomed the government’s announcement.

The increase in funding for the Affordable Homes Programme has been a push from the LGA for some time, she said.

“We have made the case for councils to be empowered to build more affordable, good quality homes quickly and at scale and this will boost councils’ ability to build desperately needed affordable housing for local communities,” Gittins said.

Kate Henderson, chief executive of the National Housing Federation, was similarly pleased.

“We strongly welcome the £500m top-up to the Affordable Homes Programme,” she said.

“This vital injection of funding, which we’ve been urgently calling for, will support housing associations to continue to deliver much-needed affordable homes in the immediate term and prevent a collapse in delivery.”

Gittins also spoke about the proposed right-to-buy reform.

“It has become increasingly impossible for councils to replace homes as quickly as they’re being sold through the Right to Buy scheme,” Gittins commented. “The LGA has long called for reform to RTB and these positive measures will support the replacement of sold homes and to stem the continued loss of existing stock.”

As for the five-year rent settlement, Gittins called it a “step in the right direction”, but added that more work should be done.

“… to really strengthen and provide stability to Housing Revenue Accounts, a minimum 10-year rent settlement is needed, alongside restoration of lost revenue due to the rent cap and a review of the self-financing settlement of 2012,” she said. “This would better support long-term business planning to ensure councils can deliver high-quality homes and associated support for their tenants.”

Tracy Harrison, chief executive of the Northern Housing Consortium, which represents most of the housing associations in the North, was of a similar mind.

“These are all great first steps, but there’s lots of work to do to in the run-up to the spending review and through the rent consultation,” Harrison said.

“Our members need long-term financial certainty to improve the quality of existing homes, including making them warmer and greener, and to deliver new homes on the scale required to meet government ambitions.

“At the NHC we’ll strongly advocate for investment that supports delivery in the North where regeneration matters, and [the Treasury] value-for-money rules (and their narrow interpretation) have too often locked out much-needed projects,” Harrison continued. “Deepening devolution, with more local control over funding, will make sure government funds make the biggest possible difference to communities in the North.”

The £500m boost to the Affordable Housing Programme is the latest in a series of announcements from the government targeting the housing crisis.

Another £128m has already been committed towards delivering more homes. This includes £56m for the Liverpool Central Docks project and £47m to help clean up pollution in rivers – a move that could unlock the delivery of 28,000 homes.

• READ MORE: Plans in for Peel’s Liverpool Central Park

The final part of the £128m will see a £25m investment in a joint venture to establish a new fund between Muse and the Pension Insurance Corporation. This fund will deliver 3,000 energy-efficient homes – with a target for all 3,000 to be affordable.

The Budget will be unveiled in full on Wednesday.