Chancellor Rachel Reeves has now unveiled the government’s long-awaited Spending Review, focused on ‘renewal’ which outlines plans for departmental budgets over the next three years—and it comes with major implications for the housing and mortgage sectors.
Much of the pre-announcement speculation proved accurate: big-ticket spending on the NHS and defence featured heavily, but so too did £39 billion earmarked for social and affordable housing over the next decade. That headline alone will be of particular interest to property professionals, developers, and lenders alike.
There were also key updates earlier this week, including a revised Winter Fuel Payment scheme, now means-tested and set to reach an additional 7.5 million pensioners—changes which could influence household budgets and broader affordability metrics this winter.
But beyond the headline figures, mortgage and housing market stakeholders will be watching closely for signs of fiscal strain. Analysts are already questioning whether today’s commitments stack up without future tax rises—something that could emerge in Reeves’ first Budget this autumn.
Here’s how property and mortgage industry experts are reacting—and what it could mean for the housing and mortgage lending landscape.
Rob Owens, Head of Research at e.surv Chartered Surveyors said: “While the government’s housing funding commitment represents a significant step forward and provides essential foundations for housing delivery, truly addressing England’s housing crisis requires a more comprehensive and coordinated approach. Beyond capital investment, we need strategic planning that recognises the fundamental interconnection between housing, infrastructure, and economic opportunity.
The current challenge isn’t simply a lack of funding, it’s the complex web of regional disparities that see high-demand areas like London and the South East constrained by costs and affordability, while other regions with cheaper land struggle to attract developers due to limited economic prospects. This creates an uneven playing field that funding alone cannot address.
What’s needed is coordinated infrastructure planning and strategic job creation to ensure homes are built where people can genuinely thrive – not just where land happens to be available. This means addressing regional inequalities through targeted investment in transport, utilities, and employment opportunities, so that housing delivery creates sustainable, balanced communities rather than simply adding pressure to already strained areas or leaving other regions behind.
The government’s investment must be coupled with a holistic vision that considers how new housing integrates with existing infrastructure capacity and economic factors. By taking a broader view, we can ensure that today’s funding translates into tomorrow’s thriving communities, delivered with true regional equality and supported by the infrastructure needed to accommodate new residents successfully.”
Jonathan Pearson, director at Residentially, said: “This new funding delivers the clearest signal yet that the Government understands the scale of the challenge facing the country’s affordable housing providers. The housing associations I work with have always stressed that they stood ready to scale up their efforts in line with the Government’s own ambitions, but they first needed to know how much money was available and how it would be allocated. Today’s announcement goes a long way towards answering that call.
While we’re still awaiting further clarity around how and when this funding will be allocated, they can at least begin to plan multi-phase schemes, secure land, and mobilise supply chains with confidence and at the pace required to help meet the 1.5 million-homes target. Not-for-profit housing associations are also forced to make every penny count when it comes to the number of new homes they can afford to take on, so longer-term certainty on rent is also going to be important when it comes to their developing their plans.”
Nick Jones, the mortgage sales and marketing director for Access FS, said: “It’s tempting to focus on the big-ticket announcements around housing – and there was certainly some good stuff in there on Homes England and social housing. But while everyone’s dazzled by the sexy stuff, Angela Rayner’s been very publicly battling to protect day-to-day funding settlement for her department, the Ministry for Housing, Communities and Local Government (MHCLG). She has been right to. While that funding is not in the spotlight, cuts there could have a major knock-on effect for levels of resourcing in local government planning support. So, while it might not grab the headlines, I’m worried reductions in local government budgets could hobble planning functions. Planning delays and under-resourced local authorities have been holding back the UK’s property market for too long – and this could make the situation worse.”
Tony Hall, Head of Business Development, Saffron for Intermediaries, comments:
“Nearly a year into the Labour Government’s term, and with the 1.5 million homes pledge looking increasingly hard to deliver, it’s really positive to see this level of investment going into affordable housing. A long-term funding commitment like this sends the right signals to developers, housing associations and lenders, and should give first-time buyers a better chance of finding a home they can actually afford.
That said, funding is only part of the equation. The planning system remains one of the biggest blockers to delivery and, without proper reform, too many projects risk being left in limbo. If we’re serious about hitting the 1.5 million homes target, we need to look at all options on the table. Self- and custom-builds are just one example of where change could unlock real progress, but only if we make it quicker and easier to get viable developments off the ground.”
Alex Slater, Rightmove’s housebuilding expert says: “Today’s news is a really positive boost for the housebuilding industry and a step in the right direction. There aren’t enough affordable homes, so we welcome any initiatives that will help the sector to deliver more of these homes to market. What will be key is making sure more affordable homes are delivered in the right places, where the gap in supply and demand is greatest. Hopefully this is one of many steps to come to support the delivery of much needed homes across the country.”
Jack Burnham, Head of Affordable Housing at Octopus Capital said: “We welcome the government’s £39bn commitment to affordable housing over the next decade, alongside the introduction of a 10-year rent settlement set at CPI +1%. This is a positive and pragmatic move that supports the scale-up of affordable housing delivery across the UK — and aligns closely with the priorities of long-term institutional investors.
The announcement effectively doubles the level of annual grant funding, from around £1.5bn to almost £4bn per year. As a fund and registered provider that already receives Homes England grant, we see first-hand the impact this support has in enabling the delivery of genuinely affordable homes. The increased allocation will allow us — and others — to bring forward more projects, in more places, at rents that are sustainable for residents and communities.
The 10-year CPI +1% social housing rent settlement from 2026 provides welcome long-term policy stability. For investors seeking secure, inflation-linked income over multi-decade horizons, this gives a robust and transparent framework that enhances the resilience and predictability of returns. It strengthens the case for affordable housing as a core component of modern social infrastructure portfolios.
This policy direction underlines the government’s recognition that affordable housing is critical national infrastructure — essential not only to addressing the housing crisis, but to delivering broader social and economic value.
At Octopus, we remain committed to investing for the long term through our Affordable Housing Fund and our for-profit registered provider, NewArch Homes. This programme gives us the tools and certainty to go further and faster, in partnership with local authorities, housing associations and developers.”
