Nearly £40bn will be allocated to local authorities, private developers, and housing associations
Today will see the long-awaited spending review in which the chancellor will lay out government spending to 2029.
It has been confirmed that an affordable housing boost is incoming, along with the allowance for social landlords to raise rent by one percentage point above inflation.
A total increase of £113bn in capital spending
In October last year, changes were made to the government’s debt rules and changes were made to the fiscal rules earlier this year.
Rachel Reeves is expected to say: “This government is renewing Britain, but I know too many people in too many parts of the country are yet to feel it.
“This government’s task – my task – and the purpose of this spending review is to change that. To ensure that renewal is felt in people’s everyday lives, their jobs, their communities.”
This affordable housing boost is expected to be a big contributor to reaching the 1.5m new homes target, with the allowance being boosted from £11.8bn to £39bn.
This will also help housing associations to buy currently abandoned private houses.
A welcome move in the industry
On Monday, a letter was sent to Matthew Pennycook MP, calling for more development of the Affordable Homes Programme.
The letter calls for more measures to be taken in the programme, including long term rent settlements.
The signatories of this letter, including BusinessLDN, Landsec, and Metropolitan Thames Valley Housing, will likely be pleased with the upcoming announcement of increasing the cap on social rents and allowing opportunities both for rents to catch up to higher rents, but also fund improvements to existing housing stock and deliver new homes.
Just two months ago, another affordable housing boost was announced in a £2bn cash injection under the Plan for Change, covering up to 18,000 new homes.
At the time, chancellor of the exchequer, Rachel Reeves, said: “We are fixing the housing crisis in this country with the biggest boost in social and affordable housebuilding in a generation. Today’s announcement will help drive growth through our Plan for Change by delivering up to 18,000 new homes, as well as jobs and opportunities, getting more money into working people’s pockets.”
Deputy prime minister and housing secretary, Angela Rayner, said: “Everyone deserves to have a safe and secure roof over their heads and a place to call their own, but the reality is that far too many people have been frozen out of homeownership or denied the chance to rent a home they can afford thanks to the housing crisis we’ve inherited.
“This investment will help us to build thousands more affordable homes to buy and rent and get working people and families into secure homes and onto the housing ladder. This is just the latest in delivering our Plan for Change mission to build 1.5m homes, and the biggest increase in social and affordable housing in a generation.”
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