Major Boost Announced with £39 Billion Housing Investment to Tackle Crisis in 10 Year Plan

Rachel Reeves, the Chancellor, is set to unveil a significant £39 billion investment in affordable housing as part of a transformative 10-year plan to address the UK’s worsening housing crisis. The announcement will nearly double current spending on affordable homes, bringing the government closer to its ambitious target of constructing 1.5 million new homes during this Parliament while marking the most substantial housing investment in a generation.

The funding, which will be allocated from 2026 to 2036, will provide grants for local authorities, housing associations, and private developers. Reeves has indicated that part of this strategy involves amending fiscal rules to permit additional borrowing, enabling wider infrastructure investment. This landmark decision follows extensive negotiations with government departments, including Angela Rayner’s housing portfolio, which now emerges as one of the key beneficiaries of the spending review.

Reeves will also introduce a decade-long programme to allow social landlords to increase rents by 1 percentage point above inflation, helping housing providers meet their funding requirements. The new approach, coupled with over £40 billion allocated to local transport projects and nuclear energy investments, signifies the government’s intent to tackle growing issues surrounding housing, energy security, and national infrastructure.

Despite its scale, the housing boost has sparked debate. Environmental campaigners have expressed concerns over relaxed planning laws that will permit building on previously protected land. Meanwhile, housing sector representatives, including Kate Henderson of the National Housing Federation, have welcomed the package, describing it as a “transformational and ambitious investment” for social housing. Shelter’s Mairi MacRae echoed this sentiment, referring to the move as a “watershed moment” in the government’s decades-long struggle with the housing emergency.

As part of her broader housing reforms, Rayner has also announced the repeal of the 200-year-old Vagrancy Act of 1824, which criminalises rough sleeping. By removing the Act, she hopes to reduce law enforcement measures targeting the homeless and introduce a fairer system to tackle homelessness nationwide. Campaigners have called this repeal long overdue, citing its potential to positively impact thousands of lives.

The £39 billion programme is expected to stimulate private sector participation, allowing housing associations to purchase unoccupied developments previously built under affordable housing quotas. Moreover, the government’s efforts to streamline the planning process aim to accelerate much-needed construction despite concerns over environmental safeguards.

This shift marks a pivotal moment in addressing the housing crisis, reflecting the government’s commitment to “getting Britain building” in line with Reeves’ vision of renewing communities and driving economic growth. The decade-long strategy promises to reshape the UK’s housing landscape by enabling significant improvements in the affordable housing sector.