The investment is part of a broader strategy to address the housing crisis and support economic recovery by encouraging construction and job creation
The government has unveiled a £2 billion investment plan to build up to 18,000 new social and affordable homes, aiming to provide safe and secure housing for hard-working families and stimulate economic growth. The announcement, made by the Chancellor of the Exchequer, Rachel Reeves, and Deputy Prime Minister Angela Rayner, marks a significant step towards the Prime Minister’s Plan for Change, which includes building 1.5 million new homes.
Deputy Prime Minister and Housing Secretary Angela Rayner emphasised the importance of the investment, stating, “Everyone deserves to have a safe and secure roof over their heads and a place to call their own. This investment will help us build thousands more affordable homes, getting working people and families into secure homes and onto the housing ladder.”
The investment is part of a broader strategy to address the housing crisis and support economic recovery by encouraging construction and job creation. The government plans to train 60,000 construction workers to tackle skills shortages and create opportunities for young people entering the workforce. The £2 billion injection is a down payment from the Treasury, with more long-term investment planned for 2026-27 and beyond.
Chancellor Rachel Reeves added, “We are fixing the housing crisis in this country with the biggest boost in social and affordable housebuilding in a generation. This announcement will drive growth through our Plan for Change by delivering up to 18,000 new homes, creating jobs and opportunities, and increasing disposable income for working families.”
Thousands of new affordable homes are expected to begin construction by March 2027 and be completed by the end of the current Parliament. The government is urging housing providers to submit projects and bids to expedite the delivery of new housing supply, making homeownership a reality for more people across the country.
Industry leaders have welcomed the investment. Kate Henderson, Chief Executive of the National Housing Federation, said, “This funding top-up is hugely welcome and demonstrates the government’s commitment to delivering genuinely affordable, social housing for families in need. Investment in social housing is not only key to tackling the housing crisis but also excellent value for money, reducing government spending on benefits, health, and homelessness while boosting growth.”
The investment will also unlock development opportunities in areas such as Manchester and Liverpool, where land is ready for construction. The announcement was made during a visit to an affordable housing site in Stoke-On-Trent, highlighting the government’s commitment to delivering the biggest boost to affordable and social housing in a generation.
Charlie Nunn, CEO of Lloyds Banking Group, added, “A safe and lasting home is the foundation for good lives and livelihoods. We welcome this boost to building much-needed social and affordable homes.”
Official figures, published on Monday, showed the average median house price cost 7.7 times the average full-time income in 2024. Temporary tax incentives for first-time buyers as well as for buyers of less expensive homes are due to expire at the end of this month. Tuesday’s funding is in addition to 600 million pounds, announced by finance minister Rachel Reeves on Saturday, to tackle severe skills shortages in the construction sector and train up to 60,000 bricklayers, electricians, engineers, and carpenters by 2029. Reeves, who has vowed to stick to her fiscal rules, is set to deliver her spring statement on Wednesday alongside new economic and public finance forecasts from Britain’s fiscal regulator.
David Thomas, CEO of Barratt Redrow, noted, “This investment will help unlock mixed-tenure developments and create jobs and economic growth across the country.”
Stephen Teagle, Chair of The Housing Forum, said, “This additional funding signals that the government is listening to the sector and reaffirms its strong commitment to accelerating the delivery of much-needed affordable housing while driving economic growth.”
The government will announce further long-term investment in the sector, as part of the Spending Review process.
