Andy Burnham has pledged a £10bn package to build tens of thousands of homes, marking the first indication of how the new prime minister plans to grapple with Britain’s housing crisis, reports BritPanorama.
This initial wave of funding will build 70,000 homes across England, with ministers stating that at least 60 per cent of these will be social rented houses.
The funding is part of the previously announced £39bn Social and Affordable Housing Programme (SAHP), agreed last year by former prime minister Sir Keir Starmer and former chancellor Rachel Reeves.
Announcing the plan, Mr Burnham stated, “Councils built this country out of a housing crisis once before. Backed properly, and trusted to get on with it, they will do it again.”
This announcement is part of the government’s broader objective to construct 1.5 million homes by 2030. Housing secretary Angela Rayner has reaffirmed the Burnham government’s commitment to this ambitious target despite acknowledging the challenges ahead.
Housebuilding: the reality
The sector currently faces acute demand for housing. Experts warn that affordable housing has sharply declined since the 2010s, as builders and councils have been hindered by rising costs and bureaucratic barriers.
The target of 300,000 new homes per year remains elusive. Recent data indicates that approximately 203,000 new homes were delivered in England in the 12 months ending June 2026, falling significantly short of the necessary figures.
Delivering affordable homes within this framework poses additional challenges. Under the SAHP, the government aims to create 300,000 homes for social or affordable rent by 2039.
Meanwhile, pressure from developers, who earn lower profits from affordable housing, is leading local authorities to reduce their affordable housing commitments.
Most notably, London Mayor Sadiq Khan lowered the affordable housing quota in new developments from 35 per cent to 20 per cent in November 2024, branding it an “emergency measure” to stimulate housebuilding in the capital.
Despite these setbacks, Labour’s focus on new housing has provided early signs of action in an industry that has stagnated for much of the past decade.
Official government figures reveal that 12,198 new social rent homes were completed in England in 2024/25, marking the highest delivery rate since the fiscal year 2013/14.
A report from the National Housing Federation last month also noted a 57 per cent increase in the starts of homes for social rent, with 13,275 initiated last year.
However, campaigners caution that these developments may still be insufficient.
The cost of affordable housing in decline
Throughout 2024/25, the net number of homes for social rent fell by 3,834. The Ministry of Housing, Communities and Local Government attributed this decline primarily to sales of local authority stock.
This loss doubled the figure from 2023/24 and suggested a troubling trend: in the decade leading up to 2025, Britain lost a total of 180,067 homes designated for social rent.
Contributing factors include demolitions, the Right to Buy scheme—enabling council tenants to purchase their homes—and a push from builders to focus on affordable rental properties instead of social rent.
In response, the government has introduced plans to reform Right to Buy, extending the minimum eligibility period from three to ten years, reducing the maximum discount, and prohibiting the sale of social homes built within 35 years.
To truly reverse the decline, housing advocates, including groups like Crisis and Shelter, assert that the UK needs to construct 900,000 social rented homes over the next decade—far exceeding the government’s target of 180,000 by 2039.
Simultaneously, statutory homelessness in Britain is reaching record levels, with around 134,000 households and over 176,130 children currently residing in temporary accommodation.
More than 1.3 million households are awaiting allocation for social housing, with many unlikely to ever ascend the priority list.
Can Burnham tackle the housing crisis?
Leaders within the housebuilding sector have welcomed the prime minister’s commitment to securing funding for new social homes, many earmarked for council ownership.
Sarah Elliott, chief executive of Shelter, remarked, “Today’s announcement puts councils back on the pitch in the fight to end homelessness.”
She added that by equipping local authorities with the necessary funding and support to deliver social homes at scale, the foundation has been laid for an impactful council housing revolution.
However, she also pointed out that “underlying obstacles” still impede councils from building effectively, which need addressing in the forthcoming budget this October.
Ongoing housing debt, which has risen from £29bn in 2012 to £31bn, poses a significant challenge. Although repayments were supposed to commence in 2012, the debt has risen due to the proliferation of Right to Buy, reducing council revenue.
Local leaders have urged for access to loans at rates of 0.1 per cent, contrasting the current 4 to 5 per cent rates, to effectively address housing shortages.
While these longstanding issues remain, Mr Burnham’s new initiative is a crucial move towards empowering local councils to increase home construction.
There is no definitive target for council home construction within the SAHP yet, but various councils are expected to partner in the £10bn funding initiative, collaborating with the seven local mayors who will benefit from this plan.
How the government allocates the remaining £29bn in funding over the coming years will be pivotal in addressing the immense housing crisis affecting the UK.
