Rachel Reeves unveils billions for inexpensive housing – six key particulars you want to know

On Jun 11, 2025

Chancellor Rachel Reeves has announced £39billion of investment in a new 10-year Affordable Homes Programme – here’s everything you need to know about the scheme

14:49, 11 Jun 2025

There are 1.3 million households stuck on social housing waiting lists in England(Image: PA)

Rachel Reeves has announced a bombshell £39billion cash injection for affordable and social homes.

Delivering her Spending Review in the Commons, the Chancellor said she wanted to ensure people had the “security of a proper home”. She said it was a plan to meet the “scale of the housing crisis”.

Ms Reeves announced a new 10-year Affordable Homes Programme, which will see £39bn of investment over the next decade. She said it was the biggest increase in half a century.

She made the commitment in the Spending Review, which sets government departments’ budgets for future years, as she promised to “invest in Britain’s renewal”. It comes as Keir Starmer pushes to meet Labour’s manifesto pledge to build 1.5 million homes by the next election.

When the plan was first unveiled last night, campaigners said the plan was “transformational” and could help reverse decades of neglect. Here’s a take a look at what the plans could mean for you.

Rachel Reeves delivered her Spring Statement in the Commons(Image: PA)

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What has been announced?

In her Spending Review, Rachel Reeves announced substantial increases in capital investment. Capital spending relates to long-term projects such as infrastructure and roads.

Among the headline figures, the Government is providing £39billion for a new 10-year Affordable Homes Programme. It means hundreds of thousands of new affordable homes will be built over the next decade.

Ms Reeves told the Commons: “Led by (Housing Secretary Angela Rayner), we are taking action. I am proud to announce the biggest cash injection into social and affordable housing in 50 years. A new Affordable Homes Programme – in which I am investing £39billion over the next decade.”

Angela Rayner, who is Housing Secretary and Deputy PM, will lead the charge on housebuilding(Image: PA)

Why is it necessary?

England is facing a huge housing emergency, with millions of people unable to access vital housing.

There are 1.3 million households stuck on social housing waiting lists in England, a rise of 10% in the last two years. Some 20,560 social homes were lost in 2023/24, primarily through Right to Buy sales and demolitions, while 19,910 were delivered – meaning a loss of 650 social homes.

In the Commons, Ms Reeves said social housing had been “neglected for too many decades, but not by this Labour Government”.

What is the Affordable Homes Programme?

The current Affordable Homes Programme (AHP) has been running from 2021 and had been due to end next year. The scheme allocates grant funding to Local Authorities and Housing Associations to help support the capital costs of developing affordable housing for rent or sale.

The new AHP will run for a decade – so double the length of the current one. Plus, the funding announced by Rachel Reeves for the new scheme far exceeds the amount previously committed by the Tories. The Treasury said Labour’s plan would see annual investment in affordable housing rise to £4billion by 2029/30, almost double the average of £2.3billion between 2021 and 2026.

Rachel Reeves’s long-awaited spending review has set out departments’ budgets for future years(Image: Kirsty O’Connor / Treasury)

Who will benefit?

Delivery of the current AHP programme is delegated to the scheme’s delivery partners Homes England (HE) and the Greater London Authority (GLA).

Councils can bid for grant funding to support the delivery for affordable homes. Funding is given on a case-by-case basis. AHP funding supports rental accommodation, homes for ownership and homes in rural settlements and supported housing for older, disabled or vulnerable people.

Ms Reeves told the Commons some areas already have plans to put in bids for affordable homes to be built in their region. She said: “Direct Government funding that will support housebuilding especially for social rent and I am pleased to report that towns and cities including Blackpool, Preston, Sheffield and Swindon already have plans to bring forward bids to build new houses.”

Is there more help for the housing crisis?

Alongside the affordable homes announcement, the Government will also address high home energy costs by improving energy efficiency through the Warm Homes Plan. The plan will help to cut bills for families by upgrading homes through insulation, heating and solar panels.

A ten-year social rent settlement will set a rent policy for social housing from 2026 that enables providers to borrow and invest in new and existing homes, while also protecting social housing tenants. It will see rents rise at CPI inflation + 1% from 2026.

Money for homelessness and rough sleeping has been protected in the Spending Review, while £100million, including from the Transformation Fund, for early interventions to prevent homelessness.

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What do experts say?

Campaigners last night hailed the £39billion announcement. Kate Henderson, chief executive of the National Housing Federation, said: “This is a transformation package for social housing and will deliver the right conditions for a decade of renewal and growth.”

Mairi MacRae, director of campaigns and policy at Shelter, said: “This increased investment is a watershed moment in tackling the housing emergency. It’s a huge opportunity to reverse decades of neglect and start a bold new chapter for housing in this country.”

While there was praise, it was warned that building social homes must be a priority within the new AHP. Currently, various types of housing fall under the ‘affordable homes’ umbrella, including shared ownership, affordable rent, social rent, first homes

Research by Shelter, a homelessness charity found that the current AHP had delivered over 74,000 grant-funded affordable homes by March 2024. Only around 11,000 – just 15% – of these were genuinely affordable social rent homes.

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Housing campaigner Kwajo Tweneboa said: “This announcement has potential – but without clear social housing targets, it risks becoming another promise that won’t deliver change for the children and families who need it most.”