Chancellor John Healey has announced an extra £1.5 billion for social housing in England in Labour’s 2026 Autumn Budget, with the government expecting the funding to support around 10,000 additional homes. Social Rent homes, particularly council homes, will be prioritised.
The announcement on 28th October 2026 takes investment in the Social and Affordable Homes Programme above £40 billion over ten years. The additional social housing funding will be allocated from 2027/28 to 2030/31, increasing over that period as councils build their capacity to deliver.
I would look closely at how quickly this money reaches projects that are ready to move forward. A funding announcement matters to a family waiting for a home when it turns into an agreed scheme, a building contract and, eventually, a front door they can walk through.
Social housing funding moves beyond the Budget previews
Reports ahead of the Budget had suggested a top-up of more than £1 billion. Inside Housing reported those expectations on 26th October. The published Budget now specifies £1.5 billion and identifies the priority for Social Rent and council homes.
That distinction matters. The wider programme supports different forms of affordable housing, while Social Rent provides homes at rents set through government rules. Readers should not assume that every one of the additional 10,000 homes will be a council house: the Budget describes a priority within the programme, rather than an exclusive allocation.
Housing providers had already argued that social housing schemes were being held back by funding gaps. On 9th October, the National Housing Federation said an extra £5.3 billion over ten years could unlock around 41,000 additional homes outside London from housing association bids that had not been fully funded.
Its chief executive, Kate Henderson, said before the Budget: “There are thousands of social homes sitting in council and housing association development pipelines that can be built if grant funding is made available.”
Responding after Healey’s statement, Councillor Eamonn O’Brien, chair of the Local Government Association, said: “Extra funding to tackle rough sleeping and for social housing is positive.” He also warned that wider council finances remained under pressure and councils would still struggle to meet demand for services.
Cheaper council borrowing and a land tax change
Healey has also extended preferential borrowing for council housebuilding for another year, through 2027/28. Loans from the Public Works Loan Board will remain 0.4 percentage points below its normal rate. That is a discount on borrowing costs, with the rate kept under review.
Setting out Labour’s wider plans for local investment ahead of the Budget, the Chancellor said: “Mayors and local leaders know what their communities need to grow”.
A separate measure could help social housing providers acquire sites sooner. Across the United Kingdom, the government plans a zero rate of Value Added Tax (VAT) on land sold to qualifying registered providers of social housing, using the relevant housing association definition in existing VAT legislation. The intended start date is 1st April 2027, following secondary legislation in early 2027.
The consultation response published alongside the Budget explains that the change should allow land to transfer before the “golden brick” stage. This is an arrangement where a transfer waits until construction has progressed enough for an existing zero rate to apply. Earlier transfer could make funding and development timetables simpler.
What happens next for social housing?
The government’s forthcoming ten-year plan will set out further steps on council capacity and public land. Individual funding allocations and the detailed VAT legislation will be the next useful tests of how the Budget commitment works in practice.
For anyone promoting land for social housing, I would start with the proposed provider, its delivery timetable and the planning constraints on the site. The planning position should be assessed alongside the funding and tax rules as they become clearer.
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