Budget 2026: Industry welcomes social housing boost – but warns govt on delivery
Developers have welcomed additional investment in affordable homes and measures to support regional growth announced in the Budget, but cautioned that funding must translate into delivery on the ground.
The chancellor’s announcement of an extra £1.5bn for the Social and Affordable Homes Programme was among the measures welcomed by the sector, alongside changes intended to reduce development costs, investment in construction skills and plans to give the West Midlands greater control over local funding.
However planning barriers, the viability of development schemes and uncertainty over future decarbonisation funding remain important challenges, as the industry picks over a raft of announcements in today’s Budget.
‘The industry is ready to deliver – but the government must step up’
Jonathan Richards, managing director at Edgbaston-based Stonebond welcomed the additional investment in affordable housing – but called on the government to provide more details on the scheme to give assurances to developers.
“From the perspective of a partnerships housebuilder reliant on registered providers to acquire our homes, there remains far too much uncertainty,” he said.
“When will this additional funding become available? How much will be allocated through Strategic Partnerships versus Continuous Market Engagement (CME)? And when will the next tranche of the original £39bn commitment be released? Announcements are welcome, but the industry needs clear funding allocations, timescales and, most importantly, the ability to access that funding.
“Stonebond, like many other SME developers working with CME partners, has shovel-ready sites capable of delivering much-needed affordable homes now. The frustration is that these developments are ready to progress yet remain constrained by funding uncertainty and the limited ability of registered providers to commit to acquisitions.
“We don’t need more headlines or announcements of future investment; we need funding released, allocated and accessible now. Every month of delay means fewer homes being built, stalled investment and missed opportunities to support the government’s own housing ambitions. The industry is ready to deliver; it needs government to match that readiness with action.”
‘Welcome news’ for social housing tenants
Jonathan Layzell, chief executive of Leicestershire housing provider Stonewater, welcomed the additional investment, saying it demonstrated the Government’s recognition of the sector’s capacity to deliver more affordable homes in partnership with local authorities.
Stonewater was allocated £350m under the Social and Affordable Homes Programme, and Layzell said the additional funding would provide further opportunities for housing providers.
“The announcements in today’s Budget will be welcome news for many of our customers – much-needed support on energy bills and wider cost of living measures will ease some of the burden faced by households across the country,” he said.
However, Layzell said the Budget had not provided the clarity needed on future decarbonisation funding, despite the potential for energy-efficiency improvements to reduce household costs.
“Many of our customers have been able to halve their monthly energy bills thanks to retrofit works delivered, in part, through grant funding. With energy prices continuing to rise, the sector urgently needs clarity on the future of decarbonisation funding to ensure more people can benefit from warmer, more energy-efficient homes and lower household costs”
Layzell also called for the publication of the Government’s delayed devolution white paper, arguing that housing associations could play an important role in supporting regional delivery and helping councils develop the capacity to build more homes.
His thoughts were largely echoed by Wayne Gethings, group chief executive at Housing Plus Group, which manages 34,000 properties across Staffordshire and Shropshire.
Earlier this year, the group announced plans to build 3,500 new homes over the next five years.
“New homes mean more people getting the keys to a place they can settle in, they also bring local jobs and apprenticeships, and real investment in local communities,” he said.
“We welcome the Chancellor’s announcement of £1 billion for social and affordable homes. For our customers and for families waiting for a safe, secure home they can afford, this really matters.”
Removal of red tape could boost delivery
Also in Shropshire, Chris Timmins, managing director of affordable housing developer SH Partnerships, said the chancellor’s first Budget has given the affordable housing sector “more to work with.”
“Removing biodiversity net gain requirements for more brownfield sites will cut cost and delay on potential projects.
“VAT-free land for social housing will also support partner schemes and there will be no major changes to building regulations, which will certainly help.”
Timmins also welcomed the focus on skills, highlighting £100m to expand local apprenticeship services as a positive step towards developing the next generation of construction workers.
“Taken together, these are wins for the sector that theoretically should help speed up delivery of the homes the country needs.
“Now the priority is turning that funding into homes on site as quickly as possible.”
Suzanne Benson, national head of real estate at Trowers & Hamlins, said the variety of targeted housing measures in the Budget indicated that the government was taking a broader view of affordable housing than initially indicated.
“The £1.5 billion top up funding for the SAHP programme will come at a welcome point for the sector giving the potential to release more funding via the CME route,” she said.
“An additional interesting reference to a new VAT relief to expedite land transfer to registered providers also has potential to speed up delivery. When combined with the increase in the income caps for accessing shared ownership announced this week and the new Your First Homes product, the planned interventions demonstrate a clear appetite to stimulate supply and support a range of housing needs.”
Government devo-agenda ‘strengthening collaboration’ on housing delivery.
Helen Collins, managing director, midlands and head of UK Living and affordable housing at Avison Young said the Budget had delivered on stability – but said a coordinated approach would be needed to meet future housing targets.
“To deliver more homes, the sector has been calling for policy stability and additional funding. We also need a fully functioning housing market with support for private housing for sale, alongside social and affordable housing supply.
“Today’s budget delivered on the stability point and the additional £1.5bn in funding for the Social and Affordable Homes programme is very welcome. Assuming an average grant rate of £130k per home, the funding will support delivery of approximately 11,500 homes – but this leaves another 28,000 or so deliverable homes unfunded and a number of experienced and capable delivery partners without strategic partnership.
“Devolution is already strengthening collaboration on regional, place-based housing delivery, including in the Midlands. A coordinated approach that brings together housing, infrastructure and long-term planning will be essential if the government is to meet its targets and create sustainable communities for future generations.”
Focus must now ‘shift to delivery’
Hardeep Kooner, director at Market Harborough-based Gateley Built Environment, said the additional investment was welcome but warned that funding alone would not be enough to meet the country’s housing ambitions.
“More than £1bn of additional investment in the Social and Affordable Homes Programme is a welcome step towards increasing the supply of much-needed affordable housing,” he said.
“However, additional funding alone will not solve the 1.5m new homes challenge. Alongside unlocking planning and regulatory barriers, the focus must now be on turning that investment into deliverable schemes, particularly given the scale and complexity of the development pipelines that registered providers and developers will be managing over the coming years.
“Long-term funding certainty gives the sector an important opportunity to plan ahead, but successful delivery will depend on having the right capacity and expertise in place throughout the development process. Ensuring schemes remain viable, managing risk effectively and maintaining quality will be critical if this additional investment is to translate into homes on the ground.”
A real shift for West Midlands infrastructure – but ‘let us get on with it’
Beyond housing, the Budget’s implications for regional investment were welcomed by Paul Inions of McPhillips Construction, who said new Good Growth Funds and changes to the way the West Midlands retains and receives tax revenues could provide greater certainty for infrastructure planning.
“Today’s Budget marks a real shift in how the West Midlands is funded, including through the through new Good Growth Funds,” he said.
“Keeping 100% of business rates locally and, from 2028, a share of income tax gives the region long-term funding it controls and can plan around too.”
Inions pointed to McPhillips’ work on Birmingham’s £3.18m Snow Hill public realm scheme and the Dudley Road improvement scheme as examples of infrastructure projects that can unlock land, encourage investment and create opportunities for communities.
“For those of us building the region’s infrastructure, both above and below ground, that means the public sector can plan ahead, and the private sector and its supply chain have the certainty to work together and deliver on that plan.
“But we’ve heard the rhetoric before, and what the region needs now is delivery. We have the resources, the skills and the desire to deliver locally. We now need the planning system unlocked and funding to come through, so we can get on with it.”
