The government has announced a £2 billion investment in social and affordable housing which is expected to fund the delivery of 18,000 new homes.

Announced ahead of the Spring Statement, the funding will only be used to support development on sites that will deliver this Parliament, the Treasury said.

The news builds on a government drive to train 60,000 new construction workers to tackle skills shortages in the industry.

Chancellor of the Exchequer Rachel Reeves said: “We are fixing the housing crisis in this country with the biggest boost in social and affordable housebuilding in a generation. Today’s announcement will help drive growth through our Plan for Change by delivering up to 18,000 new homes, as well as jobs and opportunities, getting more money into working people’s pockets”.

At the conclusion of the current Spending Review process on 11 June 2025, the government says it will announce further long-term investment into the sector in England, delivering the “biggest boost to social and affordable housing in a generation”.

Deputy Prime Minister and Housing Secretary Angela Rayner said: “Everyone deserves to have a safe and secure roof over their heads and a place to call their own, but the reality is that far too many people have been frozen out of homeownership or denied the chance to rent a home they can afford thanks to the housing crisis we’ve inherited.”

Responding to the announcement, Kate Henderson, Chief Executive at the National Housing Federation, said: “This funding top-up is hugely welcome and demonstrates the government’s commitment to delivering genuinely affordable, social housing for families in need across the country. The additional £2bn will prevent a cliff edge in delivery of new homes, ahead of the next funding programme being announced.

“Social housing is the only secure and affordable housing for families on low incomes, and the dire shortage has led to rocketing rates of poverty, overcrowding and homelessness. Investment in social housing is not only key to tackling the housing crisis, but is also excellent value for money, reducing government spending on benefits, health, and homelessness as well as boosting growth. Housing associations are ready to work with the government to deliver a generation of new social homes.”

Paul Dolan, Chief Executive of Riverside, said: “This additional £2bn of top-up funding for the Affordable Homes Programme is excellent news and a strong indication of the government’s intention to deliver the biggest boost to social and affordable housing in a generation.

“The over subscription of the previous £850m top up funding underlines the strong demand from registered providers and housebuilders to deliver more affordable homes. Today’s announcement demonstrates that we have a government that is continuing to listen to the market and will provide more funding when it is needed.

“While we welcome this additional money, it is even more important for the sector in supporting the government’s ambitious housing strategy, to receive significant, long-term sustainable funding when details of the new Affordable Homes Programme are released as part of the Spending Review in June.”

Andy Hulme, Group Chief Executive of The Hyde Group, said: “This additional funding is extremely significant for the sector as the government aims to get more spades in the ground.

“Combined with the extra £800m announced over the past six months this government has now backed the Affordable Homes Programme with almost £3bn of extra funding over the past six months.

“We welcome this top-up for the Affordable Homes Programme, which we hope is a down payment on future funding, as it comes at a time when new housing starts in England have been falling year-on-year.

“Now we need the government to agree to an expanded long-term Affordable Homes Programme at the spending review, and an ambitious 10-year, inflation-linked settlement for social rents and includes the reintroduction and acceleration of rent convergence.”

Bruce Moore, Chief Executive of Housing 21, said: “We welcome the government’s £2 billion investment in social and affordable housing as a significant and much-needed step forward. However, it’s notable that the announcement makes no specific reference to the housing needs of older people – despite this being one of the fastest-growing segments of our population.

“In 2022, there were around 12.7 million people aged 65 or over in the UK – 19% of the population. By 2072, this is projected to rise to 22.1 million, or around 27%. If older people aren’t well housed, the revenues going into social care and health are going to bankrupt the system. The right housing can support independence, reduce demand on overstretched services, and improve quality of life.

“At Housing 21, we specialise in providing high-quality retirement living and extra care housing. We’ve seen first-hand how well-designed homes and support services can reduce care costs and hospital admissions, and help people live well for longer. We’re ready to be part of the solution – working with government and local authorities to ensure that future housing investment truly reflects the needs of an ageing population.

“We also welcome the recent Older People’s Housing Taskforce report, which set out clear recommendations for future planning and investment. We look forward to building on its momentum and sharing our experience to help shape a more inclusive housing strategy.”