But social houisng sector will have to wait until the Spring for details of affordable housing funding post-2026
The government has announced plans for a new five-year rent settlement in social housing along with a 拢500m top-up for the 2021-26 Affordable Homes Programme.
Ahead of the Labour government鈥檚 first Budget on Wednesday, the Treasury over the weekend announced more details of its plan to 鈥渦nlock housing鈥�.
It said the government will consult on a new five-year social housing rent settlement, with the intention to increase rents in line with the consumer price index measure of inflation plus 1%, as is the case under the existing settlement that expires in April 2026.
A spokesperson said: 鈥淭he stock of social housing will be increased through a new five-year social housing rent settlement that will give the sector more long-term certainty on funding and allow them to invest in tens of thousands of new homes.鈥�
The government will also through its consultation also seek views on alternative options such as a 10-year rent settlement, which has been called for by social housing sector bodies including the G15, the National Housing Federation, the Local Government Association and the Chartered Institute of Housing.
The package also includes an extra 拢500m in grant funding to top-up the current 拢11.5bn AHP and deliver around 5,000 additional affordable homes.
The sector will however have to wait until the Spring for details of grant funding following the end of the current AHP in 2026.
The government says it will publish a new housing strategy next year and set out details of 鈥渘ew investment鈥� to follow the AHP in the Spring spending review.
It said the new programme will deliver a mix of home for sub-market rent and home ownership, with a 鈥減articular focus鈥� on social rent. Angela Rayner, in a statement said this will 鈥渓ay the foundations for the manifesto commitment to deliver the biggest increase in social and affordable housebuilding in a generation, and to support councils and housing associations to build their capacity and make a greater contribution to affordable housing supply.鈥�
The government has also confirmed it will implement changes to the Right to Buy scheme in line with Labour鈥檚 manifesto pledges. Discounts will be reduced and there will be greater protections for newly-built council housing, while local authorities 鈥渨ill be able to keep 100% of the receipts generated鈥� from Right to Buy sales.
It said: 鈥淭his will enable councils to scale-up delivery of much needed social housing whilst still enabling longstanding tenants to buy their own homes.鈥�
The government has also confirmed 拢128m of funding to deliver projects at 鈥渃omplex鈥� brownfield sites, including a 拢56m investment to deliver 2,000 homes at Liverpool Central Docks, 拢25m to establish a new fund with Muse Places and Pension Insurance Corporation to deliver 3,000 homes and 拢47m to tackle nutrient neutrality issues which have seen an estimated 28,000 homes held up due to river pollution rules.
Rachael Williamson, head of policy and external affairs at the Chartered Institute of Housing, said the funding announcements, alongside the Right to Buy changes, represent 鈥渁 positive step towards tackling our broken housing system鈥�
She also said a five-year rent settlement is welcome but re-iterated a preference for a 10-year agreement.
She said: 鈥淟ong-term certainty is essential for the social housing sector to effectively plan and invest so the introduction of a 5-year rent settlement is welcome. However, to fully support effective planning and sustainable investment, a 10-year settlement is needed. This level of certainty would empower housing providers to make the long-term commitments required to deliver the affordable homes that our communities urgently need and provide greater transparency for residents.鈥�
Kate Henderson, chief executive of the National Housing Federation, said she 鈥渟trongly鈥� welcomes the 拢500m top-up to the AHP.
She said: 鈥淭his vital injection of funding, which we鈥檝e been urgently calling for, will support housing associations to continue to deliver much needed affordable homes in the immediate term and prevent a collapse in delivery.
She said the NHF welcomes the consultation on the new rent settlement saying it will 鈥減rovide both transparency for residents and long term certainty and financial stability for social housing providers.鈥�
Henderson said: 鈥淭o achieve the affordable homes needed across the country, alongside this short term top-up, we look forward to a new long term housing strategy announced at the next spending review, including a significant boost in funding for social housing.鈥�
Louise Gittins, chair of the Local Government said the Right to Buy measures will 鈥渟upport the replacement of sold homes and to stem the continued loss of existing stock.鈥�
She said: 鈥淎 five-year rent settlement is a step in the right direction in providing certainty for councils on rental income, but to really strengthen and provide stability to Housing Revenue Accounts, a minimum 10-year rent settlement is needed, alongside restoration of lost revenue due to the rent cap and a review of the self-financing settlement of 2012.
鈥淭his would better support long-term business planning to ensure councils can deliver high quality homes and associated support for their tenants.鈥�
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