The affordable housing programme is about much more than a £39 billion funding pot. The bigger change is that councils are being encouraged to become serious housebuilders again.
That can mean building on council-owned land, working with housing associations and private developers, or buying affordable homes that have already been built.
For planning, that matters. A council may increasingly be the landowner, developer, partner or purchaser on a scheme, as well as the authority deciding planning applications.
What the £39bn affordable housing programme pays for
The Social and Affordable Homes Programme runs for ten years, from 2026 to 2036. Government says at least 60% of the homes delivered through it should be for Social Rent.
The programme does not replace the rest of the affordable housing system. Housing associations remain central to delivery and Section 106 agreements will still secure affordable homes on many private developments.
What the programme adds is long-term grant funding and a much stronger push for direct council delivery. Our guide to affordable housing planning explains how affordable housing fits into the planning system.
Councils are now Homes England Strategic Partners
Homes England has confirmed 33 Strategic Partners outside London. Their first allocations total £9.58 billion and are expected to support 73,600 social and affordable homes.
Most of the partners are housing associations and other established providers. The striking change is that councils have been awarded Strategic Partnership status for the first time.
The three councils are:
- Cambridge City Council, £96.4 million for 803 homes
- Eastleigh Borough Council, £154.4 million for 1,042 homes
- Newcastle City Council, £141.4 million for 966 homes
The figures come from Homes England’s 25th August announcement.
This is an expansion of council delivery, not a replacement for registered providers. Housing associations will still deliver a very large share of affordable housing.
The £9.58bn is only the first wave
The £9.58 billion is not the whole programme. Government says more than £16 billion is still to be allocated outside London, with around £5 billion still to be allocated in London.
Outside London, future funding will be available through further Strategic Partnerships and through Continuous Market Engagement. That means councils and other providers that missed the first round have not missed the whole ten-year programme.
In London, the Greater London Authority intends to offer at least £6 billion of allocations, with the capital able to receive up to £11.7 billion over the programme’s lifetime.
Mayors will help shape where the money goes
Of the first £9.58 billion, an estimated £2.45 billion is expected to be spent in six Established Mayoral Strategic Authority areas outside London.
The government’s current estimates are:
- Greater Manchester: £529 million
- West Midlands: £409 million
- North East: £445 million
- West Yorkshire: £441 million
- Liverpool City Region: £380 million
- South Yorkshire: £249 million
Mayors in those areas set the strategic direction of the programme locally, including priorities for tenures and sites. Homes England still makes the final funding and contractual decisions outside London.
Four newer Established Mayoral Strategic Authorities can also set strategic direction as the programme develops: Cambridgeshire and Peterborough, East Midlands, West of England, and York and North Yorkshire.
The Section 106 angle could matter to stalled schemes
This is where the announcement becomes especially relevant to private development.
Government is encouraging councils to combine retained Right to Buy receipts, Social and Affordable Homes Programme grant and unspent Section 106 affordable housing contributions. From the 2026/27 financial year, councils can combine Right to Buy receipts with programme grant.
That gives councils more ways to fund affordable housing. It may also help where a private developer has planning permission but cannot find a registered provider willing to buy the Section 106 affordable homes.
The new national Section 106 affordable housing engagement guidance says councils can help match housebuilders with registered providers. It also recognises that councils may acquire Section 106 homes themselves.
That does not make a council an automatic buyer. The homes still need to meet local needs, the price has to work and the funding rules have to be satisfied.
But it creates another possible route where an affordable housing package is stuck. We recently covered the related consultation on standard Section 106 agreements for medium-sized sites.
£21.8m is aimed at rebuilding council development capacity
Money for homes is not much use if a council does not have enough people or expertise to turn sites into deliverable schemes. That is where the separate Council Housebuilding Support Fund comes in. Applications for the 2026/27 round are now open, with councils able to seek funding for planning, technical and consultancy capacity.
The fund has £21.8 million of revenue funding available to 31st March 2029. It can support early work such as feasibility studies, viability work, site investigations, technical checks and development pipeline preparation.
It can also help councils build partnerships or joint ventures with registered providers and private developers.
The £21.8 million should not be added to another £46 million as if they were separate pots. The Council Housebuilding Support Fund is one part of the wider £46 million Capacity to Build programme.
That wider programme also includes the Council Housebuilding Support Service and an expanded Pathways to Planning graduate scheme.
What could this mean for planning and development?
The first effect may be more council-owned land coming forward. Sites that have sat in asset portfolios can become more realistic development opportunities if there is grant funding and a clear delivery route.
We may also see more councils making their own planning applications. That creates work around site appraisal, masterplanning, design, planning strategy, applications and development management.
Partnerships are likely to matter too. Some councils will build directly, while others will work with housing associations or private developers through joint ventures and development agreements.
In London, boroughs have since identified more than 50,000 potential council homes needing £12.3 billion of grant. That October analysis shows the scale of the opportunities, while highlighting the gap between a funding pipeline and deliverable schemes.
Councils may also become more active purchasers. Government says it intends to raise the cap on acquisition funding so councils can buy more homes while they build up their own direct housebuilding capacity.
Funding does not make a site buildable
There is an obvious trap in seeing £39 billion and mentally converting it into completed homes.
Grant does not create suitable land or planning permission. A council still needs a workable site, a viable scheme, design and technical work, procurement, borrowing where required, a contractor and the internal capacity to manage the project.
The same applies to Section 106 homes. A council’s willingness to buy them does not automatically change the planning obligation or make an unviable package viable.
The programme provides money and a much stronger policy push. The difficult work of turning that into consented and completed homes still has to happen.
Why this is worth watching now
The first £9.58 billion is the headline today, but the bigger planning story is the development pipeline that could follow.
More council land, more council-led applications, more joint ventures and more councils buying affordable homes could all change how housing schemes are put together over the next few years.
For developers with difficult Section 106 affordable housing packages, a more active council housing programme may also create another conversation worth having.
Primary sources
Affordable housing programme News Post Created: 31st August 2026
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