Chancellor makes pre-Budget social housing policy and funding commitments
Over the weekend the Chancellor of the Exchequer, Rachel Reeves, announced a package of housing related funding and policy changes. This included a £500m top-up to the affordable housing programme, consultation on a new rent settlement and changes to the Right to Buy scheme, reducing the discount and allowing councils to keep 100 per cent of receipts.
Northern Housing Consortium Chief Executive Tracy Harrison said:
“The £500m top-up for the Affordable Homes Programme will mean our members can continue building and is something we advocated for strongly in the run-up to the Budget. A 5-year CPI+1% rent settlement (with a consultation including a ten-year option) will give housing providers more certainty to plan investment. Changes to Right-to-Buy should help stem the loss of social homes.
“These are all great first steps, but there’s lots of work to do to in the run-up to the Spending Review and through the rent consultation. Our members need long-term financial certainty to improve the quality of existing homes, including making them warmer and greener, and to deliver new homes on the scale required to meet government ambitions.
“At the NHC we’ll strongly advocate for investment that supports delivery in the North where regeneration matters, and HMT value-for-money rules (and their narrow interpretation) have too often locked out much needed projects. Deepening devolution, with more local control over funding, will make sure government funds make the biggest possible difference to communities in the North.”
The Affordable Homes Programme (AHP) announcement followed numerous sector reports that the current AHP was close to fully committed. In the run up to the Budget, we made this point to government, including providing data on a number of housing sites where progress had stalled due to funding uncertainty. This announcement will go some way to support affordable housing providers in the North to continue developing, while we await the full details of a post-2026 Affordable Homes Programme in the Spring.
The Chancellor confirmed that social housing rents will be permitted to rise by CPI +1% for five years, with a consultation to launch seeking views on potential alternatives. This consultation will include potentially extending the CPI +1% rent policy to ten years, which has been the policy ask of the NHC and other sector bodies in recent months. Providing greater long-term certainty on future rental income levels will free up additional resources to invest in new and existing homes and is critical to achieving the government’s goals for social housing.
The government also announced changes to the Right to Buy scheme. Firstly, local authorities will now be able to retain 100% of the receipts they receive from any sale through Right to Buy. In addition, it has been confirmed that Right to Buy discounts will be reduced and additional protections on new-build properties will be introduced. It is hoped that these changes will both provide local authorities with greater resources to fund replacement homes following Right to Buy sales, as well as reducing the current disincentive to develop new homes that councils face, as they risk being sold off at a discount shortly after completion.
Overall, this package of changes is a strong first step in addressing some of the most immediate pressures facing the affordable housing sector, and demonstrates that the government is listening. Thank you to our members who provided detailed information to support our case to the Government to help secure much-needed funding. You can read the NHC’s full Budget representation to HM Treasury here.
Watch out for our on-the-day briefing which will cover all the announcements which will impact the housing sector in the North.
