We’re optimistic. Funding, policy direction and political will are finally pointing the same way, and yesterday’s speech reinforces the sense that council and social housing are about to move further up the national agenda.
Affordable housing, bottoming out?
30 Jun 26
At Iceni, affordable housing delivery is never far from our minds. On the surface, 2024/25 was the sector’s strongest year in over a decade with 64,762 affordable homes completed – the most since 2014/15. But behind the headline, the outlook is very different with starts slipping to 45,418, among the lowest on record. The pipeline for the next few years is running thin. And despite some variation between London and the regions, the story has been much the same – persistent under-delivery, and a backlog that’s been compounding for years.
Encouragingly, the Government’s policy response has been scaling up to meet the problem. A £39bn, ten-year Social and Affordable Homes Programme, aiming for 300,000 homes, 60% of them for social rent, sits alongside £2.5bn of National Housing Bank loans, a ten-year rent settlement, and Section 106 reform. For the first time in years, providers have the long-term reassurance from the SAHP to plan and commit at scale.
So will it translate into homes? We think the signs are encouraging. Sentiment is clearly on the turn and we’re seeing it first-hand. A new workstream of clients who are actively exploring the conversion of extant permissions into 100% affordable schemes, a notable shift that points to renewed confidence in the sector and the shifting funding landscape behind it. Headwinds remain however. The HBF estimates around £76,000 has been added to the cost of building a home since 2020, over 20% of an average new home’s value. Rising build costs, a thickening layer of regulation, from the Future Homes Standard and the incoming Building Safety Levy, and stubborn cost inflation all mean many schemes still sit on a knife-edge, and will need careful structuring to come forward.
Auspiciously, Andy Burnham, PM in waiting, has long been the sector’s vocal champion, and his speech in Manchester this week cemented that stance. Setting out his policy vision for the first time since announcing his leadership bid, Burnham pledged “the biggest council house building programme since the post-war period,” and committed to using vacant public land and higher-density development in existing towns to bring costs down. Detail remains light, particularly on the social-versus-affordable rent split and how the numbers reconcile with his earlier suggestion of directing the full £39bn at social rent. It seems clear Burnham’s ascension will bring continuity, and possibly intensification, of strong Westminster support for the sector.
We’re optimistic. Funding, policy direction and political will are finally pointing the same way, and yesterday’s speech reinforces the sense that council and social housing are about to move further up the national agenda. At Iceni, we’ve spent years helping clients navigate viability, planning and delivery challenges, so if you’re weighing where the opportunities lie, or how to get a scheme moving, come and talk to us.
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