Chancellor Rachel Reeves has delivered her spending review to the House of Commons, laying out day-to-day and capital spending plans.
During her wide-ranging speech, Ms Reeves announced the biggest cash injection into social housing in 50 years, with financial markets reacting calmly to the announcements.
“Rachel Reeves’ spending plans have been greeted by a calm reaction from financial markets. The pound has flexed its muscles against the dollar, amid hopes for better growth prospects ahead. The FTSE 100 is hovering near a record high, while the domestically-focused FTSE 350 has gained ground. Housebuilders are among the biggest gainers today, after the Chancellor pledged to spend £39bn on affordable homes.”
Susannah Streeter, Head of Money and Markets, Hargreaves Lansdown
The sector also secured a ten-year, CPI plus 1% rent settlement, a consultation on rent convergence and equal access to building safety remediation funding.
“The strong focus on defence, housing, energy and infrastructure is set to drive continued growth in real estate investment opportunities across the UK.
“Regional markets were also in focus throughout the spending review, with these markets currently attracting heightened interest from real estate investors, moving beyond the traditional focus on London. Cross-border capital flows into these regions surged by 39.1% in Q1 2025 alone, extending a positive trend that began in mid-2024. Strikingly, if London were excluded, the UK would now rank as the third most attractive destination globally for Commercial Real Estate investment – ahead of major markets like France, Australia and Japan.“
Nik Potter, Associate – Commercial Research, Knight Frank
The Government has already pledged to build a massive 1.5 million new homes by the end of this Parliament to deal with the housing crisis.
“A £39bn Affordable Homes Programme and a ten-year rent settlement is a game changer – this is the first ever ten-year grant programme. Long term certainty creates the platform for driving real momentum in affordable housing and housebuilding generally.
“Critically, it should unlock more private capital for affordable housing and then overlay LGPS reform, and we have the ingredients for place-based investing at scale. Rent convergence, if reinstated, will unlock further capacity for building new homes.
“With declining SME builders and a shortage of construction workers early action at pace and scale is needed to train a new generation of construction workers to deliver on the ground. Clarity over Homes England’s future role and ability to provide low-cost funding to support SMEs is key – without it we’re limiting the system’s ability to deploy the capital that can now be leveraged at scale.
“if housing is to drive growth and unlock regeneration, then the institutions delivering it must be equipped to act with pace and purpose. This Spending Review sets the tone, now it’s about delivery.”
Helen Collins, Principal – Managing Director Midlands and National Head of Affordable Housing, Avison Young
Reeves told the Commons there will be a £39bn boost for social housing over the next decade.
“Investment in rejuvenating places up and down the country is welcome and ensures that people live, work and want to move into vibrant communities. Propertymark also welcomes additional funding for affordable and social homes as we know this will help meet the UK Government’s ambitious housing target and have the knock-on effect of bringing down the cost of renting in the private rented sector.
“Planning reforms must also work alongside a housing strategy which is much anticipated to be published by the UK Government to ensure we are building the right homes in the right places, and we can meet housing need up and down the country.”
Timothy Douglas, Head of Policy and Campaigns, Propertymark
It is believed the money will be provided through Homes England to housing associations, councils and developers, though details are still unclear.
“This is a significant and welcome announcement from the Government. For too long, the housing sector has lacked the long-term certainty needed to plan and deliver at scale. RICS has consistently called for an increase in public investment to match the ambition of building 1.5 million homes, and this 10-year programme does just that.
“RICS also welcomes the focus on developing the energy infrastructure required to support energy security and grid decarbonisation, supporting economic growth.
“Importantly, this commitment provides the clarity and confidence that local authorities and the wider built environment sector need to get construction started and to invest in the people, skills and materials that will make this ambition possible.
“We now need to ensure this ambition translates into action, with the right enabling conditions in place from a well-resourced planning system to a skilled a workforce. RICS and our members are ready to support the delivery of high-quality, affordable homes for communities across the UK.”
Justin Young, CEO, RICS
The chancellor also said Homes England would be designated a public financial institution, with an additional £10bn for financial investment ‘to unlock more homes’.
“With really tough choices to be made in the Spending Review we are delighted that the Government has prioritised the delivery of affordable and social housing and that it is investing significant additional sums to support a sector that has faced tough headwinds in recent years.
“The Government has also delivered the ten-year rent settlement which we and the wider sector have been advocating for a long time. This is a significant step forward to help the sector to plan with more certainty and to help unlock the huge amount of long term private capital such as pension funds, that wants to invest in genuinely affordable homes.”
Melanie Leech, Chief Executive, British Property Federation
However, there were only a handful of references to London throughout the Chancellor’s spending review speech.
“The acid test for this Spending Review is whether the Government’s rhetoric on growth is matched with the investment needed to kickstart the economy.
“The Chancellor has delivered some welcome additional spending on infrastructure, transport and skills. But it looks like London has been left short-changed.
“The Government’s growth mission can only be achieved by unlocking the full potential of London. As a UK-wide engine of growth, the capital accounts for a quarter of the country’s economy. Its substantial net contribution to the public coffers rightly supports spending in other parts of the country but must also enable London to grow.”
John Dickie,Chief Executive, BusinessLDN
