For the data behind the commentary, download the full June 2025 UK Economy & Housing Report.
Spending Review
On June 11th, the Chancellor of the Exchequer delivered the Government’s Comprehensive Spending Review, setting out departmental budgets to 2028/9 and capital investment plans to 2029/30. With not much additional finance to be spread across all budgets, the big winners in terms of capital allocation were healthcare and defence. Nevertheless, the review was one of the tightest we have seen outside of the Austerity years.
However, there were notable positive commitments to housing and infrastructure in particular and a further pledge to the Government’s own property estate relocation - with 50% of civil servants outside London by 2030, and a disposal of surplus estate.
One of the most noteworthy elements of the Review was the commitment of £39 billion to – a near doubling - to the Affordable Homes Programme (AHP) for ten years. This is the largest commitment to social and affordable housing in decade and is done in conjunction with a 10-year rent settlement from 2026 set at CPI+1%, which aims to set certainty for landlords and tenants alike, as well as a consultation on rent convergence.
Additionally, there has been £2.5 billion in low-interest loans for RPs to boost supply capacity, £1 billion for land remediation, and £4.8 billion in financial transactions to support social housing development, as well as a change in borrowing rules that creates an additional £10 billion for Homes England. Separately, there was a commitment of £13.2 billion over the Spending Review period to the Warm Homes Plan while since the Review, there has been a further announcement of a £16 billion-backed National Housing Bank, which will aim to provide a range of debt and equity to enable housebuilding and regeneration sites.
With the National Industrial Strategy pushed back, and the Infrastructure Strategy due later this month, there is likely to be much more flavour added in the coming weeks and months. However, the largest commitments were to regional transport projects including the Transpennine Route upgrade and the delivery of the East West Rail, the flooding programme and Sizewell C. Of the sizeable commitment to Defence spending, £7 billion was allocated towards improving military accommodation.
