Chancellor Rachel Reeves has unveiled a landmark £39 billion housing plan as part of the UK government’s multi-year spending review, aimed at tackling the nation’s deepening housing crisis. The plan represents the largest state investment in social and affordable housing in a generation, intending to build 1.5 million homes over the next decade. Reeves described the initiative as a core pillar of Labour’s long-term strategy to boost growth, improve living standards, and reduce reliance on housing benefits.
The ambitious 10-year programme will significantly expand support for local authorities, housing associations, and private developers, particularly in towns and cities outside London and the South East. A key component of the plan is the provision of direct grants to these bodies, enabling them to deliver more affordable homes faster. In a further move to help stabilise the housing market, the government will allow social landlords to increase rents by 1 percentage point above inflation annually, a measure intended to enhance the financial sustainability of housing providers.
While the housing sector has welcomed the announcement, the plan has sparked concern among some political figures in London. Allies of London Mayor Sadiq Khan have expressed concerns that the capital may not receive a proportional share of the funding, potentially placing further pressure on the already strained housing system in the city. However, the government insists that the initiative is designed to address regional imbalances and ensure economic regeneration in overlooked areas.
This new housing strategy is part of a wider £100 billion infrastructure investment programme outlined by Reeves. The broader spending review includes major allocations to sectors such as transport, energy, and research and development. Specifically, £86 billion is earmarked for innovation and scientific research, while £16 billion will go toward public transportation improvements. Investments in defense and nuclear energy are also included, reflecting the government’s multifaceted approach to long-term growth.
Despite the fanfare around housing and infrastructure, some departments, including the Home Office, are expected to face real-terms spending cuts. Reeves has acknowledged the challenge of balancing fiscal discipline with ambitious investment, but she remains confident that strategic funding will deliver long-term benefits.
The £39 billion housing boost is seen as a defining policy of Reeves’ tenure as Chancellor and a central piece of Labour’s promise to build a fairer and more resilient Britain. The next challenge lies in ensuring swift and effective implementation to meet the ambitious targets.
