On Wednesday (28th January), Housing Secretary Steve Reed MP announced new measures which will provide greater financial support for councils and housing associations to accelerate social and affordable housebuilding, described as the biggest boost to grant funding in a generation, along with energy-saving standards to cut the cost of living for millions of social tenants.
Government says housing providers will have to meet robust standards to provide homes that are free of disrepair and damp, warm and energy-efficient through a new Decent Homes Standard (DHS. This is in addition to new requirements to upgrade properties under new Minimum Energy Efficiency Standards that government believes could save social tenants hundreds of pounds every year on their energy bills.
The new measures include:
- Making £2.5bn in loans available to private registered providers of social housing at just 0.1% interest, empowering them to unlock more social and affordable homes.
- Allocating an extra £3.5m through the Council Housebuilding Support Fund for councils to draw up plans for thousands more council homes. Alongside the £5.5m already provided last year, this will unlock the delivery of up to 9,800 new homes through the Social and Affordable Homes Programme.
- Increasing the Housing Revenue Account threshold — a ringfenced account for income and spending on councils’ own housing stock — from 200 to 1,000 homes. This will enable smaller councils to build more homes without incurring additional operating costs.
- Extending the discounted borrowing rate for council housebuilding from the Government’s lending facility, the Public Works Loan Board, so councils have the funds they need to press ahead with plans to build new homes at scale.
- Confirming how social rent convergence will be implemented so providers can bring rents that are currently below the Government’s formula up to that level over time, which will strengthen their financial capacity to invest in new and existing homes.
Housing Secretary Steve Reed MP Housing Secretary Steve Reed said: ”Every new social home means one less family stuck on a housing waiting list. Building more social housing is crucial to fixing the housing crisis for good. But that’s only part of the story. We’re also driving up the quality of social housing so they’re well insulated and damp-free to keep families safe and cut their energy bills in the years ahead.”
This announcement comes ahead of bidding opening next month for the £39bn Social and Affordable Homes Programme (SAHP).
The Government’s eagerly awaited decision on rent convergence has also been announced. The sector’s investment needs have increased significantly and housing providers are spending vast sums of money on repairs and maintenance, whilst rents for social homes have reduced over the last decade. The positive news is that Government has confirmed that social housing providers ‘will be able to increase weekly rents for their Social Rent properties that are below formula by up to an additional £1 on weekly rents each year over and above CPI+1% from 1st April 2027, and by up to an additional £2 on weekly rents each year over and above CPI+1% from 1st April 2028, until formula rent is reached’.
Here we share opinion from across the sector to both these announcements.
Thousands more families to get warm, secure social homes
Gavin Smart, CIH Chief Executive, commented: “CIH welcomes the announcement of new funding and regulatory certainty for social and affordable housing, building on the 2025 Spending Review and supporting the delivery of more high-quality, affordable homes.
“We particularly welcome the new Decent Homes Standard, updating minimum standards for the first time in 20 years and strengthening action on damp, mould and energy efficiency — crucial to improving quality of life and reducing living costs for tenants.
“Measures to accelerate council housebuilding, increase financial flexibilities and reform the Section 106 market, alongside social rent convergence, should strengthen the sector’s capacity to invest in both new and existing homes.
“We recognise that delivery at scale will require strong leadership, careful planning, and collaboration across the sector. CIH will continue to support members to navigate these changes and deliver the government’s ambition for safe, decent and affordable homes for all.”
New measures recognise scale of new homes required and need to improve quality of existing homes
Graeme Anderson, Chief Executive of Bromsgrove District Housing Trust, said: “The announcement from Government is a welcome step in recognising both the scale of housing need and the importance of improving the quality of existing social homes.
“In areas like Bromsgrove, where demand for affordable housing continues to grow and many homes are older and harder to heat, investment that supports both new supply and higher standards is particularly important. Measures to tackle damp, mould and poor insulation, alongside a stronger Decent Homes Standard, have the potential to make a real difference to residents’ health, wellbeing and energy bills.
“It will be important to understand the detail of the proposals — including how funding, loan arrangements and support to unlock stalled Section 106 homes will work on the ground — to ensure they are practical and deliverable for local providers.
“bdht is committed to investing in our existing homes while continuing to work with partners to deliver new affordable housing that meets local need. We look forward to working constructively with Government to ensure these reforms support long-term investment and deliver lasting benefits for our communities.”
New measures provide long-term certainty needed
Phil Andrew, Group Chief Executive at Orbit commented: “We welcome the Government’s continued support for the housing sector, with the measures providing us with the further long-term certainty needed to play our part in delivering its decade of renewal. Whilst we will need time to digest the detail, we appreciate the clarity provided, which will enable us to more effectively plan our strategic investments in our existing homes, alongside our commitment to supporting the Government in achieving its ambition to build 1.5m new homes. We must continue to work together and keep up the momentum needed to make an impactful difference in tackling the UK’s housing crisis, and we at Orbit are firmly committed to actively playing our part.”
Scale of ambition welcome
Jonathan Layzell, Chief Executive at Stonewater, said: “The announcements from Government are a positive step for social housing, bringing together new investment in affordable homes with higher standards for the quality and energy efficiency of existing ones.
“The scale of ambition — including funding to accelerate housebuilding and measures to tackle damp, mould and poor insulation — is welcome and aligns with the sector’s shared focus on improving outcomes for customers. It will be important to understand the detail of the proposals, including how new low-interest loan arrangements and further measures to unlock Section 106 homes will work in practice, to ensure they are deliverable and supported by long-term certainty on rents and funding.
“Stonewater remains committed to investing in our existing homes, making them warmer, safer and more energy efficient, while also continuing to build the new affordable homes our communities urgently need. We look forward to working constructively with Government as the detail of these proposals is confirmed.”
New measures will help ramp-up investment
Paul Dolan, Group Chief Executive of Riverside, commented: “It is positive government has listened to the sector on our need for long-term certainty and the announcements will help to further ramp-up investment in new and existing homes.
“Analysis showed more than half (57%) of social homes managed by London’s largest landlords had diverged away from formula rent, meaning G15 members alone were missing out on £2bn of resources over a decade.
“Rent convergence is essential for enabling social landlords to sustainably increase capacity to deliver both more new homes and increase investment in existing homes for customers and communities over the long-term.
“Whilst rent convergence will not be introduced until next year, it is important that future administrations retain convergence until rents equalise as this ensures fairness — people living in homes of the same value in the same area.
“From a new-build perspective we are particularly pleased to see government announcing £2.5bn in loans at 0.1% interest so social landlords can deliver more homes.
“We welcome the Government introducing a new Decent Homes Standard and coupled with the Minimum Energy Efficiency Standards will raise the quality and create safer, warmer homes.
“The new Decent Homes Standard has an important role to play in unlocking landlords’ wider plans to regenerate estates and renew neighbourhoods so that the standard helps to create stronger and more cohesive communities as we improve homes.”
Rent convergence announcement welcome, the increased income will provide crucial funding to help housing providers comply with legislation
Samantha Grix, Partner at Devonshires, said: “After many months of waiting we have finally received confirmation that rent convergence for social rent stock will be permissible for 10 years but with staggered implementation.
“The impact £2 a week rather than £1 a week will have on the sector is significant, so the higher figure applying for a majority of the rent settlement will also be welcomed. Ultimately this increased income will provide crucial funding to comply with both current and incoming regulatory requirements relating to condition.
“The Government has confirmed that rent convergence will be applicable for 10 years — the length of the new Rent Standard — which provides the very certainty that the sector wanted. This allows RPs to pin down their financial projections and plan their longer-term strategy. However, this is said with a word of caution because we have seen previous governments tear up rent policy (dare I say the words rent reduction?) but there is optimism in the sector that this will not happen given the commitment to deliver 1.5m new homes.
“Robust control mechanisms are also going to have to be lined up to make sure the right level of convergence is applied in each year, that it is applied only to relevant tenancies and it is stopped when the re-let rent has been met. Given how complex rent regulation has been and currently is, this will certainly not simplify things.”
Rent convergence decision provides welcome certainty for social housing providers
Emma Hardman, Partner in the housing management team at Anthony Collins, commented: “The announcement confirming the position regarding rent convergence, and the permitted increases, provide welcome certainty for Registered Providers (RPS) of social housing — many of whom have been waiting to press ‘print’ on their annual rent and service charge review letters ahead of April increases, following the delay in the announcement previously expected in the Budget.
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