James Barrett, Head of Affordable Housing at BNP Paribas Real Estate commented: “Today's Spending Review delivers a powerful one-two punch for the UK's housing crisis, placing planning reform and affordable housing squarely at the heart of the government's growth agenda.
“Confirming a new 10 year £39bn Affordable Homes Programme is a significant step in the right direction towards transforming the fortunes of the social housing sector. This new Programme amounts to £3.9bn of funding a year on average, which is a significant increase on the £2.5bn allocated under the existing programme, taking account of recent top ups.
“This certainty around the AHP comes on top of confirmation of a 10-year social rent settlement which will see rents rise at CPI+1% a year from 2026 and consultation will follow on how to implement social rent convergence.”
“A longer-term rent settlement and rent convergence have long been fundamental asks of the sector and this news, coupled with the AHP certainty will kick-start a generational boost in the delivery of new social homes.”
“The measures announced today are vital in creating a solid long term financial platform for the sector which will in turn draw in additional capital. As highlighted in our Capitalise on the Future: Affordable Housing Report, For Profit Registered Providers are increasingly delivering across general needs, supported housing, and low-cost home ownership. Whilst London accounts for 25% of FPRP’s, significant growth is happening across the North West, Yorkshire, the South West, and Midlands. Their flexible, long-term capital model is well-placed to weather economic volatility and respond to shifting local authority needs. This additional and significant flow of capital into the sector is what is desperately needed to help drive a sustained and significant upturn in social housing delivery.”
Caroline McDade, Head of National Planning at BNP Paribas Real Estate commented: “Crucially, this investment is twinned with decisive planning reforms. The Office for Budget Responsibility (OBR) forecasts that changes to the National Planning Policy Framework (NPPF) – reintroducing mandatory housing targets and modernizing Green Belt policy for low-quality 'grey belt' land – will lead to an additional 170,000 homes and boost real GDP by 0.2% by 2029-30, all with "no fiscal cost". This underscores the government's belief that bureaucratic hurdles, not just funding, have been a major drag on delivery.
“To ensure these reforms translate into spades in the ground, £46 million was earmarked to boost local planning authority capacity, including training 300 new planners. This is only a fraction of what is needed, when also accounting for low statutory consultee resource. Wider Government department cuts are likely to impact local authority budgets leaving planning reliant on this limited funding stream and planning application fees.
“The forthcoming Planning and Infrastructure Bill will further streamline consenting for critical projects, promising a faster, more certain approvals process. This combined with the new 10-year Infrastructure Plan, due next week, which amongst other things commits to a more strategic and spatial infrastructure approach beyond just the energy sector, underpins the Government’s strategy for delivery. However, there is a risk of too many layers complicate the strategy undoing the streamlining aim. Furthermore, balancing significant infrastructure growth and environmental concerns will remain a hot topic.
“For developers and housing providers, the message is unambiguous: the pathways for delivery are being cleared, and the capital is being committed. The challenge now is to leverage these policy shifts and substantial investments to build the homes the nation desperately needs.”
This commentary featured in IPE Real Assets, Property Week, BTR News, Social Housing and Be News.
