Chancellor Rachel Reeves has announced nearly £40 billion worth of grants for affordable housing over the next 10 years in the government’s latest spending review.

The money will be made available for local authorities, private developers and housing associations, and represents a vast increase on the previous programme.

She additionally announced that social landlords will be able to raise rents by one percentage point above inflation for the same period.

Reeves told the House of Commons that the funding was “the biggest cash injection in social and affordable housing in 50 years”.

The housing sector has been quick to react to the spending review. Nicholas Harris, Chief Executive at Stonewater, said: “It’s clear that the government still has some big fiscal challenges to navigate. But few issues are more important than fixing the housing crisis and making sure people have access to safe, affordable homes.

“There are currently far too many individuals and families stuck on housing waiting lists. Not having a stable place to call home can seriously affect a person’s prospects, wellbeing and overall happiness.

“It is hugely reassuring to see long-term funding for affordable homes of £39bn. This programme has been instrumental in helping Stonewater deliver thousands of much-needed homes across the country, including some developments with over 100 affordable homes. Support for this work must continue to give housing providers like us the confidence to plan long-term, invest in ambitious developments and deliver the homes communities urgently need.

“The new rent settlement at CPI+1 gives us much greater financial stability and certainty, which will be vital when planning our long-term investments and goals. This gives us an assured income stream and will unlock significant capital investment that will help us to deliver new homes and support existing customers. We sincerely hope that the Government stands by this settlement to provide much-needed certainty for the sector.

“We await to hear more details of any funding for the Warm Homes Social Housing Fund, but welcome the reassurance that the Government still values the positive impact that retrofit projects have made to customers’ lives. This fund has enabled us to complete retrofit projects across Stonewater’s existing homes, making properties more sustainable, warmer and more affordable for customers.

“One customer who received retrofit work at their home in Wiltshire, including the installation of an air source heat pump told us, ‘I’ve gone from paying £12 per day for heating that didn’t make a difference, to now paying £3 – sometimes even less – for heating and hot water. It’s made a huge difference to my life.’ We look forward to continuing to support this essential work as we move forward on the journey to Net Zero.

“Today’s spending review announcements are important. We have built relationships with both national and local government, which put us in a strong position to make the most of the announcements to deliver homes for those who need them most. We look forward to the imminent publication of the Housing Strategy, which will give us further detail on the government’s plans for affordable housing moving forward.”

Phil Andrew, Chief Executive at Orbit, said: “After years of uncertainty and underfunding, we welcome the housing measures announced by the chancellor in today’s spending review. We have consistently campaigned for a long-term funding settlement. One which provides us with the financial certainty required to make strategic investments that balance our need to upgrade the homes of our existing customers, whilst building new high quality affordable homes for our communities.

“I am absolutely delighted that the government has heard our calls and confirmed a 10-year rent settlement, coupled with an additional £39 billion for the new Affordable Homes Programme. Together, these will help us to support the government in realising its ambitions to build 1.5million homes and plan our strategic investments more effectively, to be able to improve our current homes and ensure they are future-fit for our customers.

“Whilst today’s measures are significant and much-welcomed steps, we must not lose momentum and continue to recognise that the UK’s housing crisis cannot be tackled overnight. We look forward to hearing more about the new Affordable Homes Programme will work, particularly how it can support in regenerating the UK’s ageing housing stock to ensure it is fit for modern living standards.”

Clare Miller, Chief Executive of Clarion Housing Group, said: “The chancellor’s commitment to a £39 billion Affordable Homes Programme over the next decade is a game-changer for families on the lowest incomes. Long-term, reliable subsidy is the only way to keep new rents genuinely affordable while covering the rising costs of land, labour and materials.

“For the first time in living memory, housing associations have ten years of certainty. That gives us the confidence to borrow, build and invest at scale—unlocking sites that simply don’t stack up without grant and protecting every pound of residents’ rent for services and maintenance.

“Clarion stands ready to work with government, local authorities and our partners to turn this funding into bricks and mortar. With the right subsidy we can deliver thousands of high-quality, energy-efficient homes and help Britain break the back of its housing crisis.”

Jonathan Higgs, Chief Executive of housing association Raven Housing Trust, said: “Today’s Spending Review represents a landmark shift for housing. The government’s commitment to invest £39bn over the next decade, along with the framing of affordable housing as a core part of national renewal, is a bold and welcome step forward. It sends a clear signal that housing is not just a social priority, but an economic and environmental one too.

“For organisations like Raven, this provides the long-term confidence needed to plan, invest and deliver at greater scale – whether that’s building new affordable homes, retrofitting existing stock to meet net zero, or supporting communities to succeed.

“With rising demand for affordable housing in areas like Surrey and Sussex, today’s announcement creates new possibilities – notably more stable grant funding and the potential for longer-term rent-setting arrangements, which could unlock greater borrowing capacity to reinvest into homes and services.

“But ambition alone won’t build homes. There are still real risks to delivery. To make the most of this investment, we need a planning system that is faster and more responsive, a construction workforce that has the skills and scale to meet demand, and clarity on how funding will be distributed across the country. The 1.5 million homes target is a big ask – and without the right structure behind the investment, there’s a risk we fall short.

“We also can’t ignore the wider fiscal context. While capital investment is increasing, day-to-day departmental budgets remain under pressure, and the prospect of future tax rises or spending constraints could complicate long-term delivery.

“At Raven, we’re ready to meet the challenge. With the right backing, we can go further and faster – creating high-quality homes, supporting sustainability goals and delivering real social value for residents and communities. This could be the turning point we’ve waited for – but now it’s all about turning funding into action.”

Steve Partridge, Director and Head of Affordable Housing Consultancy at Savills, said:  “The government has listened to the calls of the housing sector, delivering more support for social and affordable housing and starting to address the housing crisis.

“A 10-year rent settlement at CPI +1% is a positive move. It’s a step towards meeting the challenge of building 1.5m homes in England, providing stability in the event of any future political change and confidence for housing providers and investors to commit to increasing the supply of new affordable homes.

“This stability encourages private capital investment, backing recent research from Savills that 150,000 homes would be owned by For-profit providers by 2030, with a quarter of this being social rent.

“It also provides confidence for local authorities to increase their role in the delivery of new social and affordable housing; if we are to deliver the homes we need, local authorities will need to play an increasing role.”