Government adds third top-up for Affordable Homes Programme

Following commitments of £500m in October and £350m in February, Chancellor Rachel Reeves said an additional £2bn slug would enable a further 18,000 homes across the country.

Ahead of the Spring Statement tomorrow and the Spending Review to be released in June, this forms part of a programme to deliver Prime Minister Keir Starmer’s ‘Plan for Change’ with its much-vaunted 1.5m new homes target.

It also follows the government’s plan to kickstart an uptick in skilled trades with a programme to train 60,000 construction workers.

The government said the £2bn comes “as a down payment from the Treasury ahead of more long term investment in social and affordable housing planned later this year, which will provide additional funding for 2026-27 and for future years”.

The majority of the funding slug will fall in 2026/27, but a tail of funding will cover completions of homes after this. All projects funded through this £2bn will need to start by March 2027, and will need to finish by June 2029.

Funding will be made available to providers on the same terms as the Affordable Homes Programme for 2021-26, and will act as a bridge to the future grant programme to be announced at Spending Review. The government will ask Homes England and bidders to prioritise homes for social rent.

The investment will also unlock development and opportunity on sites that are ready and waiting for spades in the ground, the government said.

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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.

“At the conclusion of the current Spending Review process on 11 June 2025, the government will announce further long-term investment into the sector in England, delivering the biggest boost to social and affordable housing in a generation.”

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.”