No doubt over the coming weeks and months, there will be scrutiny and intense debate on the deliverability of the commitments contained within yesterday’s Spending Review - but for now, those of us who work in the Affordable Housing Sector cannot help but feel optimistic by The Chancellors commitment of £39bn to the Affordable Homes Programme (AHP) over the next 10 years. This will provide funding of almost £4bn a year, compared to £2.3bn currently. In addition, a 10 year (CPI + 1%) rent settlement has been announced, giving housing providers more certainty and capacity to deliver new homes and invest in longer term multi-phased schemes.

The main takeaways for the housing sector:

• 10 year programme with substantial increase in funding for affordable homes
• New 10 year rent settlement allowing social housing landlords to increase rents annually by CPI + 1%, with the promise of a consultation on rent convergence, allowing cheaper rents to rise more quickly, to address historic differences in rents across similar homes.       
• Social Housing providers to get access to the Building Safety Fund, with £1bn of further investment to remediate existing blocks. 
• £950m to the Local Authority Housing Fund to increase the supply of good quality temporary accommodation.
• Part of a £10bn Financial Investments fund to go to Homes England to attract private investment to unlock development.
• £2.5bn for low interest loans to social housing providers to boost development capacity. 
• Reaffirmation of £13.2bn for Warm Homes Plan, funding energy efficiency retrofits to existing homes
• Permanent extension of the Mortgage Guarantee Scheme, helping First Time and other buyers.      
• The support and funding given to large infrastructure projects will also help unlock housing delivery e.g. metro extensions in Birmingham, Tyne and Wear, Stockport and a 4 year settlement for Transport for London

We look forward to seeing how the detail develops, particularly how the AHP is allocated by region, which tenures get the lions share and how much grant is allocated per unit. Viability has and continues to be exceptionally challenging. We hope the public funding outlined in the 2025 Spending Review and the measures to attract more private finance into the sector, will go some way to addressing this challenge.  

The Review has been positively received by housing providers who are looking to kick start their delivery programmes to continue to contribute towards the governments ambitious 1.5m homes target.