Autumn Budget 2024 – Key takeaways for the social housing sector

Chancellor Rachel Reeves delivered the Labour Party’s first Budget in 14 years last week (Wednesday 30 October 2024).

Although most of the key social housing announcements had been ‘announced’ before she delivered her speech, the Budget was still seen as a welcome breath of fresh air.

With changes to Right to Buy, the introduction of a rent cap and a boost to the Affordable Homes Program, the new government has proven it is not pandering for votes but actively creating sound policies to fix a neglected, broken system.

We’ve outlined the key takeaways from the Budget below:

Right to Buy reforms 

Under the new reforms, Right to Buy discounts will be scaled back, while councils will retain the full proceeds from Right to Buy sales. This shift creates a strong incentive for local authorities to reinvest in housing and boost new home construction.

Right to Buy has been widely criticised this year, with many calling for its scrappage. Some may say the government is being cowardly by not taking this stance (and only reducing the discount), however, Right to Buy provides many people with their only opportunity for home ownership. It’s right that an attempt should be made to fix it before getting rid of it completely.

Between its implementation and the end of March 2023, over two million homes were purchased through the scheme. However, the financial pressures faced by local authorities have meant a huge number of these haven’t been replaced with new stock, leading to a bigger deficit, longer waiting lists and overwhelmed councils.

It’s hoped that reducing the discount and allowing local authorities to retain the full receipt from any sales will allow councils to get a head start on creating a sustainable housing pipeline to replace stock at the rate it is being lost.

Rental cap

As part of its commitment to addressing the social housing shortage, the government plans to consult on a new five-year rent settlement for the sector.

The sector has been crying out for years for a rental cap, so this consultation clearly shows this government is listening to experts. Helping housing associations plan a long-term strategy and budget, rather than continuing to make them brace for the many reforms, tweaks and changes that currently happen on an annual basis will be invaluable to ensuring the sector functions effectively and funds are spent wisely.

Affordable Homes Programme

To expand the availability of affordable social housing, the Government has committed £5 billion for housing in 2025-26—an increase of £1 billion over the previous year. This includes an additional £500 million for the Affordable Homes Programme, aimed at creating up to 5,000 new affordable homes. This initiative is designed to support local communities and address the critical demand for quality housing.

Overall, this increased investment brings total funding for housing supply to over £5 billion. An additional £128 million has been designated for housing projects across the UK, with plans to deliver 33,000 new homes. This substantial commitment underscores a significant step toward creating affordable, sustainable housing options for those in need.

What does the future of social housing sector look like?

Although it’s impossible to predict whether these changes will be enough to solve all the sector’s woes, they are a positive start and focus on a long-term solution that is flexible to change, whilst still providing security, certainty and sustainability for the sector.

This government seems to finally understand that any housing strategy must be designed to last longer than the average six-month lifespan of the average housing minister under their predecessors. If this approach continues, the sector will thank them for it.