Rachel Reeves’ second Budget, delivered on 26 November, included significant changes to the tax and welfare systems but said relatively little about housing. Welfare reforms include ending the two-child benefit cap and introducing new earnings disregards to reduce the benefits ‘cliff-edge’ faced by tenants in supported or temporary accommodation who take up work. But there was no response to the housing sector’s call for Local Housing Allowance rates to be raised in line with the increase in private sector rents. Nor any decision to increase subsidy for temporary accommodation, although the Treasury will lead a Value for Money review of homelessness services. And the expected decision on rent convergence for social housing has been delayed until January.
The Government’s Warm Homes Plan, allocated £13.2 billion by the Spending Review last summer, was expected to launch in October, including details of future funding for social housing decarbonisation, but is not now expected to appear until later in December. The Chancellor announced an extra £1.5 billion for capital investment to tackle fuel poverty, funded from the savings from scrapping the ECO scheme which required energy suppliers to part-fund energy efficiency improvements. This is expected to mean that average annual household fuel bills will be around £150 less next year than they would have been.
Owners of homes worth more than £2 million will pay a High Value Council Tax surcharge from April 2028, and private landlords will pay an extra 2% on property income from April 2027.
The Spending Review announced a £5 billion National Housing Delivery Fund to finance infrastructure and land acquisition to enable the development of large and complex housing schemes. The Fund is expected to launch in April 2026. The Budget announced that around a third of the funding will be devolved to mayoral strategic authorities in London, Greater Manchester, Liverpool City Region, the North East, South Yorkshire, West Yorkshire and the West Midlands. These authorities will also be able to bid for around £7 billion from the Social and Affordable Homes Programme to “set strategic direction for social and affordable housing in their areas”.
£48 million has been provided to enable recruitment of 350 additional planning officers, by expanding the graduate trainee scheme and creating a planning career hub to help retain and retrain mid-career professionals.