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The UK government has committed about £39bn over ten years to a Social and Affordable Homes Programme for 2026 to 2036, expected to fund around 300,000 homes, at least 60 per cent of them for social rent. Delivering them will test council and housing-association capacity, construction costs and the wider 1.5 million homes target.

Key takeaways

  • The government has committed about £39bn over ten years to a Social and Affordable Homes Programme running from 2026 to 2036, according to the Ministry of Housing, Communities and Local Government.
  • The programme is expected to support around 300,000 homes, with at least 60 per cent, roughly 180,000, earmarked for social rent, delivered through Homes England and the Greater London Authority.
  • Right to Buy has been reformed, extending the qualifying period to ten years, protecting new social homes from sale for 35 years and letting councils keep all sales receipts.
  • The wider pledge to build 1.5 million homes in England by 2029 appears off track on current output, according to independent assessments.
  • Delivery risks include high construction costs, skills shortages, stretched provider balance sheets and inflation eroding the real value of the settlement.

Britain's ambition to build a new generation of social and council homes now has a price tag and a decade-long timetable. At the June 2025 Spending Review, the government committed around £39bn over ten years to a new Social and Affordable Homes Programme running from 2026 to 2036, according to the Ministry of Housing, Communities and Local Government. Ministers describe it as the largest cash settlement for affordable housing in a generation, with at least 60 per cent of the roughly 300,000 homes it is expected to fund earmarked for social rent. Yet the gap between political ambition and delivery on the ground remains wide, and whether the money translates into a genuine building boom is far from settled.

What the government has committed

The centrepiece is the Social and Affordable Homes Programme for 2026 to 2036, funded with about £39bn over ten years. According to the department, annual grant funding is set to rise to £4bn a year by 2029-30 before increasing in line with inflation for the remainder of the decade. The programme is expected to support the delivery of around 300,000 homes, with a minimum of 60 per cent, roughly 180,000, for social rent, the most heavily subsidised and secure tenure. The remainder is intended for shared ownership and other forms of affordable housing.

That represents a marked shift in emphasis. Previous affordable housing programmes leaned heavily towards intermediate tenures such as shared ownership and affordable rent, which are cheaper for the state to subsidise. By committing the majority of grant to social rent, ministers are signalling a return to the kind of deeply affordable housing that councils and housing associations have struggled to build at scale for decades. The National Housing Federation has described the settlement as a significant step, while cautioning that funding alone will not guarantee delivery.

Ministers have framed the ten-year horizon as central to the plan, arguing that long-term certainty allows providers to invest in land, supply chains and workforce in a way that short funding cycles never permitted. The programme forms part of a wider agenda the government has badged as a decade of renewal for social and affordable housing, which also encompasses rent settlement policy, regulation of the sector and investment in the quality of existing homes. Taken together, these strands are intended to rebuild both capacity and confidence across the sector.

How the money will flow

The programme will be administered principally through Homes England outside London and the Greater London Authority within the capital. The GLA is set to receive up to £11.7bn, or up to 30 per cent of the total, reflecting London's acute affordability pressures. Homes England will allocate its share through a mix of continuous market engagement for individual schemes, portfolio deals and strategic partnerships with the largest providers, an approach designed to give housing associations the certainty they need to plan multi-year development pipelines.

Alongside grant, the government has pointed to about £2.5bn in low-interest loans available between 2026 and 2030, delivered through the new National Housing Bank and the GLA. Cheaper borrowing is intended to improve the viability of schemes at a time when higher interest rates have made development finance more expensive. The combination of long-term grant certainty and subsidised debt is central to the government's argument that providers can now plan with confidence over a ten-year horizon rather than the shorter cycles that characterised earlier programmes.

The 1.5 million homes target

The affordable programme sits within a broader pledge to build 1.5 million net additional homes in England over the course of this Parliament, a target the government has said should be met by no later than 2029. The overwhelming majority of those homes are expected to come from private housebuilders rather than the public purse, but social and council housing is intended to play a larger supporting role than in the recent past.

Independent assessments suggest the headline target will be challenging to meet. According to the fact-checking organisation Full Fact, around 342,000 net additional homes had been added by mid-March 2026, roughly 23 per cent of the way to 1.5 million, with delivery in 2024-25 slightly lower than the previous year. The Office for Budget Responsibility forecast in November 2025 that cumulative net additions across the UK would approach 1.5 million between 2024-25 and 2029-30, though that period and geography do not map exactly onto the England-only pledge.

The government's own department has reportedly estimated delivery of around 1.1 million homes by the end of 2028-29, which would leave the pledge some way short. The Home Builders Federation warned in late 2025 that the target was likely to be missed. None of this makes a building boom impossible, but it underlines that current output would need to accelerate sharply, and sustainably, for the ambition to be realised.

Right to Buy and borrowing reform

For councils in particular, the economics of building depend heavily on Right to Buy. In April 2026 the government confirmed reforms intended to slow the loss of social stock. The minimum period a tenant must hold a tenancy before buying is being extended from three years to ten, and newly built social homes will be protected from sale under the scheme for 35 years after completion, so that fresh public investment is not quickly lost.

Discounts are also being reduced. Under the revised structure, discounts are set to start at 5 per cent of a property's value and rise by one percentage point a year to a maximum of 15 per cent, or a cash cap, whichever is lower. Maximum cash discounts had already been cut to between £16,000 and £38,000 depending on region. Crucially, councils are now able to retain all receipts from sales and combine them with grant to fund replacement homes, reversing arrangements that many local authorities argued had made it impossible to build back what they lost.

Council and housing association capacity

Money and rules are necessary but not sufficient. The bodies expected to deliver, councils and housing associations, are under considerable financial strain. Many housing associations have been diverting resources towards fire safety remediation, damp and mould, and the repair of ageing stock, following heightened regulatory expectations and high-profile failures. Those competing demands limit the capacity available for new development, however generous the grant on offer.

Council house building, in particular, is starting from a low base. Local authorities built very few homes for decades after the Right to Buy era began in the 1980s, and rebuilding development teams, land pipelines and technical expertise takes time. The government's reforms to Right to Buy and the Housing Revenue Account are designed to give councils more room to borrow and invest, but turning policy changes into completed homes is a multi-year undertaking rather than an immediate switch.

Capacity varies widely between authorities. Some larger councils and combined authorities have retained or rebuilt housing companies capable of delivering at scale, while many smaller authorities have little recent experience of development and will need to partner with housing associations or build fresh expertise. How quickly that capacity can be expanded across the country, rather than concentrated in a handful of active builders, will shape whether the settlement translates into homes in the places where need is greatest.

Construction costs and delivery constraints

The wider construction backdrop is testing. Building costs have risen substantially in recent years, driven by higher materials prices and labour shortages, squeezing the viability of schemes that must also meet tougher energy efficiency and building safety standards. Skilled trades are in short supply, and the pipeline of new workers has not kept pace with the ambitions set for the sector.

Planning is another persistent bottleneck. The government has pursued reforms to the planning system and mandatory local housing targets in an effort to speed approvals, but local capacity, infrastructure constraints and objections can still slow delivery. For affordable housing specifically, much supply has historically come through obligations on private developers, so a weaker private market can indirectly reduce the flow of affordable homes even when public grant is available.

Delivery is also uneven across the country. Land values, build costs and local authority capacity vary widely between regions, so the same grant can achieve very different results in London, the North and rural areas. The heavy allocation to the capital reflects its affordability crisis, but ensuring that other regions can absorb funding and build at pace will be important if the benefits are to be felt nationally.

Why it matters

The stakes are high for households, the public finances and the wider economy. Social housing waiting lists in England run into the millions, and the number of households in temporary accommodation has climbed to record levels, imposing heavy costs on local authority budgets. More social and council homes could reduce those pressures, lower the housing benefit bill over time and give lower-income families greater security.

For the construction sector and its supply chain, a sustained programme of public investment offers a more predictable source of demand than the private market alone, potentially supporting jobs and skills. For the economy more broadly, housing affordability affects labour mobility, productivity and living standards, so the success or failure of the programme carries implications well beyond the housing market itself.

Investors in the housing association sector, including buyers of the bonds that many providers issue to fund development, will also be watching closely. A credible, well-funded programme can support the financial resilience of providers and the flow of private capital into affordable housing. Conversely, if costs and obligations outstrip income, providers may scale back ambitions, with knock-on effects for supply.

Key risks and uncertainties

Several risks could blunt the impact of the settlement. The biggest is delivery capacity: even with funding in place, providers may struggle to build at the required pace if costs stay high, skills remain scarce and balance sheets are stretched by existing obligations. Grant of £39bn spread over a decade, while substantial, must also contend with inflation eroding its real value over time.

There is also uncertainty about whether the 300,000 affordable homes and the wider 1.5 million target can be reconciled with current output. If private housebuilding remains subdued, the overall total will be harder to reach, and affordable supply that depends on developer contributions could suffer. Policy continuity matters too: long-term programmes require stable funding and rules across multiple years and, potentially, changes of government.

What to watch next

Several indicators will show whether ambition is turning into delivery. Bidding rounds and strategic partnership allocations from Homes England and the GLA will reveal how quickly providers commit to schemes. Annual housebuilding statistics, and in particular the number of social rent homes started and completed, will be the clearest measure of progress against the 60 per cent commitment.

It will also be worth watching how councils respond to the Right to Buy and borrowing reforms, whether housing associations feel able to expand development alongside their repair obligations, and how construction costs and interest rates evolve. Independent assessments from bodies such as the Office for Budget Responsibility and parliamentary committees will provide periodic reality checks on the trajectory.