Healthcare and defence dominated yesterday’s overarching fiscal announcement, but what about the UK’s housing crisis?
Chancellor Rachel Reeves delivered Labour’s 2025 Spending Review yesterday (Wednesday 11th June) afternoon. The speech pledged an extra £29bn for the NHS however this figure was dwarfed by the promise of £113bn set to be spent on infrastructure projects and housing over the next four years.
While the large sum has been welcomed, analysis and experts have asked for clarification on exactly how they are expected to deliver new developments, particularly housing, when aspects concerning materials and timeframes remain unclear.
Below, a number of property and construction experts have expressed their views.
Andrew Orriss, chief executive of the Structural Timber Association
‘Housing is the biggest challenge that the UK currently faces, and the Labour Government underpinned it is one of their main objectives throughout their election campaign and budgets. It was positive to see that the government has reaffirmed this commitment with a pledge of £39 billion for affordable housing over the next ten years.
‘With the government reconfirming their commitment to the revised Timber in Construction Policy Roadmap in February 2025, there is certainly no doubt that increasing the use of structural timber and offsite manufacturing is a key aspect of ensuring the rapid and high-quality delivery of these vitally needed homes.
‘The Structural Timber Association remains wholly committed to working collaboratively with government, industry partners, and stakeholders to drive a transformative approach.’
Cllr Claire Holland, chair of London Councils
‘Increased investment in affordable housing is hugely welcome and critical for tackling the capital’s housing crisis. This is a potential gamechanger in our efforts to accelerate housebuilding and it’s vital that London gets its fair share of this funding.
‘However, the outlook for boroughs is still extremely difficult and there remain serious risks to our financial stability. More than a decade of structural underfunding, fast-rising demand for services and spiralling costs have pushed council budgets in London to the brink.
‘The upcoming reforms to local government funding are now ‘make or break’ for London boroughs. The resources we receive must match the high levels of need, deprivation and cost of delivering services in the capital.’
Nick Diment, director of Boyer
‘We welcome investment in the North and Midlands from levelling up perspective, though the exclusion of London from the announcement was notable and disappointing.
‘That said – and this needs to be recognised in the draft London plan – the approach to delivering economic growth shouldn’t be reliant on the delivery of infrastructure alone. Any effective economic strategy needs to be robust enough to stand on its own two feet and not reliant on infrastructure. My expectation in that with the right economic circumstances London will remain the powerhouse of the UK as it always has.’
Jonathan Carr-West, chief executive of the Local Government Information Unit
‘This was a ‘missions’ driven Spending Review – with eye-catching sums for projects aimed at delivering growth, clean energy and a 3% rise in spending on the NHS. Angela Rayner has clearly persuaded the Chancellor to put the affordable homes agenda front and centre of today’s statement, with that promise of £39bn.
‘It was a Spending Review full of hard choices for the government in the face of tough financial circumstances, a position all of us in local government are used to. These decisions will have major implications for local government and local communities across the country for years to come.
‘The Chancellor’s Spending Review also reinforced this government’s commitment to devolving power to regions across England, commits the government to major investments in housing and infrastructure, and pledges new funds to support regional and local growth across England and the devolved nations. This should be welcomed.
‘While [the speech] was never going to answer every unanswered question that local government has, it does outline when we might expect at least a few answers. Reorganisation, changes to the allocation of funding settlements, devolution, SEND reform, and, eventually, social care funding reform, all of these were promised in the Spending Review. They are all crucial to putting local government back on a sustainable footing – but they have all been promised before.
‘Optimal delivery of every single one of the government’s missions needs robust and financially stable local government. And once again, the government’s plans for how that will be achieved are left dangling just out of reach.’
Sarah Rowe, partner and head of social housing at Freeths
‘What has been announced is a 50% uplift on the size of the previous programme and for the first time in living memory will provide ten years of certainty. This alongside the rent settlement at CPI+1% for the same period is the long-term reliable subsidy that the sector has been calling for, for a long time.
‘The devil as always will be in the detail in terms of grant rates, whether there will be a focus on social rent, where the shortage is acute, or any monies available for S.106 units where the market is in dire straits which is ultimately having a knock-on effect to the overall delivery of housing.
‘The hard work begins now. Securing the partnerships needed to support the delivery afforded by the Affordable Homes Programme will be key to this. Partnerships was a key topic at UKREiiF a couple of weeks ago and I am sure will be on the agenda at Housing 2025 at the end of June.’
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