The announcement is part of the Westminster Government’s promise to build 1.5 million new homes and its commitment to “deliver the biggest boost to affordable and social housing in a generation”.

The £2 billion investment comes as a down payment from the Treasury ahead of more long-term investment in social and affordable housing planned later this year, which will provide additional funding for 2026-27 and well as for future years. 

Under the plan, thousands of new affordable homes will start construction by March 2027 and will be completed by the end of this Parliament. The government is encouraging providers to come forward as soon as possible with projects and bids to ramp up the delivery of new housing supply.

Today’s investment will also unlock development and opportunity on sites that are ready and waiting for spades in the ground in places such as Manchester or Liverpool.

Chancellor Rachel Reeves announced plans on a visit to an affordable housing site in Stoke-On-Trent with Deputy Prime Minister Angela Rayner.

Deputy Prime Minister and housing secretary, Angela Rayner, said: “Everyone deserves to have a safe and secure roof over their heads and a place to call their own, but the reality is that far too many people have been frozen out of homeownership or denied the chance to rent a home they can afford thanks to the housing crisis we’ve inherited.

“This investment will help us to build thousands more affordable homes to buy and rent and get working people and families into secure homes and onto the housing ladder. This is just the latest in delivering our Plan for Change mission to build 1.5 million homes, and the biggest increase in social and affordable housing in a generation.

Chancellor Rachel Reeves added: “We are fixing the housing crisis in this country with the biggest boost in social and affordable housebuilding in a generation. Today’s announcement will help drive growth through our Plan for Change by delivering up to 18,000 new homes, as well as jobs and opportunities, getting more money into working people’s pockets.”

The majority of this funding will fall in 2026/27, but a tail of funding will cover completions of homes after this. All projects funded through this £2bn will need to start by March 2027, and will need to finish by June 2029.

The funding will be made available to providers on the same terms as the Affordable Homes Programme for 2021-26, and will act as a bridge to the future grant programme to be announced at Spending Review. Homes England, GLA and bidders will be asked to prioritise homes for social rent, in line with the government’s commitment to support this tenure.

Full details of wider long-term and future grant investment will be announced at the Spending Review. At this point, the government will set out the full funding for 26/27 and beyond, to supplement this down payment of £2bn.

​In February this year, government statistics revealed a net loss of 7,723 social homes in England over the previous year, as sales and demolitions continued to surpass the number of homes built: 17,589 social homes were either sold or demolished, with just 9,866 social homes built. Over the past 10 years, there has been a net loss of 180,067 social homes in England.

Matt Downie, chief executive of Crisis, said: “Across England, the desperate shortage of social homes has had profoundly damaging consequences. Homelessness is increasingly rapidly and record numbers of families are trapped in temporary accommodation.

“Today’s announcement is hugely welcome. We hope this signals the beginning of a social housebuilding programme that will radically shift this country’s response to homelessness, putting housing at the heart of the solution.

“With over 240,000 households experiencing homelessness in England alone, we urge the Westminster Government to ensure that the vast majority of the initial 18,000 homes are for social rent so that people facing homelessness can access them. If we want to give everyone the foundation of a safe home, we need to build homes that everyone can afford.”