Reeves Launches £39 Billion Housing Drive
Chancellor Rachel Reeves has announced an ambitious £39 billion investment in social and affordable housing over the next decade, nearly doubling existing commitments. This marks one of the most significant boosts to housebuilding investment in a generation, aimed at progressing the government’s ambition to deliver 1.5 million new homes by 2029.
The funding will be distributed via grants to local authorities, housing associations, and private sector partners, aiming to secure thousands of new homes and address current shortfalls. Housing providers will also have the option to raise social rents by one percentage point above inflation for the same period, alleviating pressure on their finances.
Part of a larger spending package
This initiative forms a central part of a broader £113 billion capital spending package unveiled by Reeves, made possible by revised fiscal rules permitting increased borrowing for capital projects. The review also allocates an extra £15.6 billion for local transport schemes and £14.2 billion to support the Sizewell C nuclear power station.
The housing settlement followed intense negotiations between Reeves and Housing Secretary Angela Rayner before the deadline for departmental budgets. Their agreement secured the housing boost but came as other departments—such as the Home Office (cut by around 7 percent in real terms), Defra, and the Foreign Office—face tighter settlements.
What ministers are saying?
Kate Henderson, Chief Executive of the National Housing Federation, described it as “the most ambitious affordable homes programme in decades.” Meanwhile Shelter’s policy director Mairi MacRae highlighted it as a “watershed moment” in tackling the housing emergency.
The boost comes shortly after Parliament passed planning reforms designed to streamline construction on previously protected sites—seen as a necessary complement to the funding. Environmental groups, however, warn these reforms could endanger sensitive habitats.
A wider government vision
Reeves framed the measures as part of Labour’s goal to “renew Britain,” emphasizing long-term economic stability and improving people’s everyday lives. Beyond housing, the spending review includes:
- A 2.3 percent real-terms annual increase in overall departmental budgets
- A £29 billion uplift to the NHS budget
- A rise in defence spending, reaching 2.6 percent of GDP by 2027
- Investment in green energy, including home insulation, nuclear, and carbon capture
- Major upgrades to public transport away from London
The Chancellor’s spending review delivers a landmark £39 billion housing programme over ten years, embedded within a £113 billion capital investment blueprint. It reflects Labour’s broader pledge to boost public services, infrastructure, and regional equity—but also entails constrained budgets for several departments.
