How the Government’s 2025 Spending Review may kickstart a decade of social housing renewal

The UK’s housing sector in 2025 is undergoing major shifts, with Government reforms aiming to boost supply and affordability. Unsurprisingly, a central focus of the Government’s 2025 Spending Review is England’s housing crisis.  

Here, Maya Tajuddin takes a closer look at these recent changes and what it means for the social housing sector.   

Tackling the housing crisis 

As Matthew Pennycook, Minister of State at the Ministry of Housing, Communities and Local Government, asserts, “ending England’s acute and entrenched housing crisis will be a painstaking and laborious effort that will require focus, energy and determination over many years and the Government is prioritising working in close partnership with the housing sector”.  

There are plans to introduce several new mechanisms into the housing sector, coupled with the revamp of monetary backing under the 2025 Spending Review. So how does the Government plan to tackle the existing housing crisis?  

The starting point: Spending Review  

The Government’s Spending Review 2025 marks a significant shift in housing policy. It has a strong emphasis on affordability, regeneration and long-term investment into the housing sector. The Spending Review sets out a plan to pump money into housing to prevent undersupply and improve numbers, as well as increase the quality and efficiency of available social housing.  

To aid these changes, a Government Policy Paper announced the replacement of the Affordable Homes Programme with a new one, named the Social and Affordable Homes Programme. This new programme promises to deliver around 180,000 new homes for social renting and at least 60% of the Government’s £39bn housing programme budget for the next decade will be allocated for social renting homes too. The 180,000 homes target is six times higher than the number which was previously proposed under the last affordable homes programme.   
  
The Spending Review also announced a ten-year plan to increase social rents annually by CPI (Consumer Price Index) plus 1% (predicted to be 2.7%) in its Ministry of Housing Settlement, with a detailed consultation to follow. This formula aims to increase rent stabilisation going forward and hopefully provide some consistency to a historically inconsistent issue.  

The top-line changes that the Spending Review brings to the housing sector are as follows:   

• Increased housing availability in the UK.   
• Genuinely affordable rents for tenants.   
• Improved living standards through modernised homes.
• Steps towards rectifying the perpetual homelessness in the UK.   

  
Key legal changes   

The Government’s recent package of housing reforms proposes some key legal changes, starting with the extension of the Decent Homes Standard that will now apply beyond social landlords to include privately rented dwellings for the first time. Landlords must ensure that their properties meet the updated criteria for safety, repair and modern facilities. This aligns the private sector with obligations that have been long imposed on councils and housing associations.    

This extension creates a unified minimum standard across tenures and empowers tenants to demand remediation or pursue enforcement through local authorities or the Regulator of Social Housing.  

The Spending Review also proposes a possible Minimum Energy Efficient Standard (MEES) for social landlords and providers. While this doesn’t mean that MEES will be enforced, it sets a new direction and expectation for a higher standard to be upheld by social landlords, which is already in place for private landlords.   
   
If this comes to fruition as currently drafted, all social homes may be expected to achieve a prescribed Energy Performance Certificate (EPC) ‘C’ rating. Previously, the minimum was ‘F’, which compels investment in insulation, heating upgrades and other heating technologies. This could also mean the introduction of a new MEES requirement for thermal comfort.   

Impact on housing development & construction

As part of the Spending Review, £4.8bn in financial transactions (FTs) had been confirmed for the 2026-27 to 2029-30 period, aimed at catalysing private investment and accelerating housebuilding efforts.  

Furthermore, the creation of a National Housing Bank aims to bolster new housing development and construction. The National Housing Bank will unlock £53bn in private investment through equity, guarantees and flexible loans, but also prioritise small- and medium-sized enterprise (SME) developers.   
   
At present, upfront infrastructure costs are among the biggest roadblocks to housing development, particularly in the case of housing schemes that rely on investment in roads, utilities and community assets before house building can even commence. The impact of which is greater developer confidence thanks to long-term funding stability and reinforcing housing as a national infrastructure project, rather than just a market commodity.   
   
The introduction of the National Housing Bank aims to stifle longstanding issues by prioritising smaller developers, allowing access to finance for SMEs from outside of the more restricted banking sector and by bridging the existing funding gap in the housing sector.  

With a mix of regulatory and legal changes to the housing sector, the Spending Review represents a credible commitment to housing delivery, development, reform and improvement.  

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Our housing team is here to help you stay compliant with relevant laws and regulations as they change going forward.  

Talk to us by calling 0333 004 4488, emailing hello@brabners.com or completing the contact form below.