Spending Review: what it means for housing associations

The recent Spending Review has set out the government’s plans for tax and spending over the coming years – but for housing associations, some of the most welcome news comes in the form of investment and long-term funding clarity.

Central to the sector is the confirmation of a CPI + 1% rent settlement over the next decade. After a period of rent uncertainty, this policy provides much-needed stability and gives housing associations the confidence to invest in new developments and maintain existing stock. The long-term nature of this commitment marks a shift toward a more strategic and sustainable approach to housing delivery.

Major uplift in housing investment

Another key headline announcement was the pledge of £39bn of investment into new social and affordable housing over the next 10 years, with an annual allocation of £3.9bn – a significant uplift from the £2.3bn per year under the previous Affordable Homes Programme. This increased funding signals the government’s recognition of the continued and growing demand for new homes across the country.

A further measure is a consultation on rent convergence, which would seek to align the rents of similar social housing properties over time. According to the National Housing Federation, more than 70% of social homes in 2023/24 were let at below formula rent.

Wider planning reforms underway

These policies come alongside broader housing-related initiatives recently announced, including:

• Proposals to streamline and digitise the planning process
• Revisions to the National Planning Policy Framework
• The introduction of a new Planning and Infrastructure Bill

These reforms are part of the government’s wider ambition to deliver 1.5 million new homes by 2029, addressing both housing supply and affordability in the long term.

Positive momentum for the sector

Charlie Martin, a member of our housing associations team, comments:

“The Spending Review was welcome news for the social housing sector. The long-term rent settlement and £39bn funding commitment are exactly the kind of measures housing associations have been calling for to support strategic planning and investment. The consultation on rent convergence is another positive step. When taken together with recent planning reforms, this package of announcements offers a much clearer path toward delivering the 1.5 million homes target.”

We’re here to help

We’ll be continuing to monitor the detail as further guidance and legislation is published. In the meantime, please get in touch if you’d like to discuss how these changes could affect your organisation.