Thousands more families to get warm, secure social homes

Thousands more families will get the keys to quality social and affordable homes under 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.  

New measures unveiled by the Housing Secretary today (Wednesday 28 January) will give councils, housing associations, and other providers greater financial support to ramp up construction of new homes. This will deliver on government plans to bring down record-high numbers of families and children stuck in temporary accommodation or on housing waiting lists.  

Landlords will also have to meet robust standards to provide homes that are free of disrepair and damp, warm and energy efficient homes through a new Decent Homes Standard (DHS), updating decency standards for the first time in 20 years. This is on top of new requirements to upgrade properties under new Minimum Energy Efficiency Standards that could save social tenants hundreds of pounds every year on their energy bills.  

The latest update comes ahead of bidding opening next month for the historic £39 billion Social and Affordable Homes Programme (SAHP), ensuring every single penny is spent effectively to accelerate social and affordable housebuilding at scale – and this builds on the Housing Secretary’s ‘rallying cry’ to provide hundreds of thousands of affordable homes for families priced out of homeownership.

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.

I’m calling on everyone who has a part to play to build, baby, build.

Councils who have not built in years will be empowered to start building again as government removes administrative costs of council house building. Councils will be able to build up to 1,000 new homes without having to open a new Housing Revenue Account. This is a ring-fenced account for councils to manage their housing income and expenditure but comes with a set of administrative costs to open and operate.  

Decisive action is also being taken to unlock homes delivered through Section 106 agreements where no affordable housing provider is willing to buy, with a new emergency, time-limited approach that will allow the tenure of uncontracted Section 106 units to be varied in such circumstances.

In tandem, the government will work hand-in-glove with providers, councils, and developers to agree a framework to get the Section 106 market moving again, with new measures to reset and expand the market, simplify the process, and boost financial capacity of providers to buy these homes.  

Alongside building more homes, the government is overhauling living standards for millions of existing tenants. A new DHS will apply minimum standards to improve the quality of all social homes, including the condition of roofs, doors and windows, and a more robust response to tackle damp and mould – building on phase one of Awaab’s Law to fix these hazards within strict timeframes. It will also apply to privately rented homes for the first time.   

From 2030, social landlords will also be required to upgrade homes to meet new energy efficiency standards, and this could include improving insulation, putting in solar panels, or installing modern heating systems such as heat pumps. This will not only slash the cost of heating for families but also make homes warmer. 

Taken together, this significant set of actions announced today accelerates the government’s five step plan to usher in a decade of national renewal for social and affordable housing – delivering long-term security and stability for families.  

The government’s ambition is to deliver around 300,000 new social and affordable homes over the SAHP’s lifetime, with a target of at least 60% of homes for social rent. If achieved, the programme could deliver around six times more than the number of grant-funded social rent homes delivered in decade up to 2024.

Chief Executive of the National Housing Federation, Kate Henderson said

“Today’s announcements provide vital certainty for the social housing sector, delivering a serious, long-term plan for social housing.

“The reintroduction of rent convergence after ten years is both fair for tenants and will enable the social housing sector to build vital new affordable homes while increasing investment in existing ones. Alongside this, the commitment to strengthen Section 106 will ensure that affordable housing remains at the heart of mixed communities across the country.

“We welcome clarity on the new Decent Homes Standard and energy efficiency targets, which will give housing associations the confidence to continue planned work to improve the quality of their homes and bring down energy bills.

“We’re also delighted that today marks the launch of a new social housing taskforce, through which we will agree a compact to strengthen our long-term partnership with the government, local councils, and social housing residents.

“These announcements give our sector the confidence to deliver on our shared ambition of a generational boost to social housing.”

CEO of the Chartered Institute of Housing, Gavin Smart said

“We welcome today’s 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.”

Further information

The government has announced a series of measures to give new funding and financial flexibilities to social and affordable housing providers. This includes 

• Making £2.5 billion 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 £3.5 million through the Council Housebuilding Support Fund for councils to draw up plans for thousands more council homes. Alongside the £5.5 million 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.   

Challenges in the Section 106 market leading to a build-up of unsold and uncontracted homes have arisen due to range of factors. Pressures on social housing providers from severely constrained financial capacity, rising building costs, and higher costs of finance have led to a scaling back of buying Section 106 homes, as well as concerns that some Section 106 homes do not meet the quality and other standards required. Negotiations on Section 106 agreements can also create delays in the planning process and increase costs for local authorities and developers. Providers and developers have been unable to agree on the price of new affordable homes.

The government has published details of emergency measures to get the Section 106 market moving again and prevent the problem recurring by laying the foundations for a simpler, more transparent, and more resilient Section 106 system.

The government has also announced the process to agree a compact with the social housing sector, urging all providers to come forward with ambitious pledges to ramp up housing supply.  A new social housing taskforce, made up of key players from the sector, will hold the sector to account on delivering the biggest increase in a generation.

The government has already taken decisive steps to rebuild social housing finances by introducing a 10-year settlement, alongside giving social landlords equal access to government funding schemes to speed up the pace of remediation (the Building Safety Fund and Cladding Safety Scheme).