What housing associations need from the Spending Review 2025

The NHF has written a response to the 2025 Spending Review following extensive engagement with, and input from our 570 members. 

Summary

Housing associations are uniquely placed to support the government to deliver the Plan for Change – by kickstarting growth, ending homelessness, building 1.5m new homes and tackling the climate emergency.

The Spending Review is the opportunity to set out the funding needed to deliver the government’s long-term housing strategy. Our submission focuses on rebuilding financial capacity to build new homes, a new Affordable Homes Programme, building safety measures and saving supported housing.

A significant increase in social housebuilding is vital to meeting the government’s 1.5m homes target. However, due to significant financial pressure and a challenging operating environment, many housing associations are reducing their development programmes and their expenditure on Section 106 homes.

To turn this around requires a package of measures to rebuild capacity, unlocking housing associations’ ability to borrow and build new social homes. This includes:

• A 10-year rent settlement with annual increases capped at CPI+1% and a fair and consistent approach to rent convergence for those homes below formula rent, as set out in detail in our response to the recent consultation on social housing rents.
• Targeted grant funding and policy support for the safety, quality and decarbonisation of existing social homes, to speed up remediation, improve homes, and unlock borrowing capacity for new supply.

To ensure housing associations rebuild financial capacity to invest in new homes, while also meeting building safety standards, we are asking for:

• Equal access to the Building Safety Fund and Cladding Safety Scheme for social landlords.
• Underwriting of buildings insurance risk for buildings with safety defects.
• Zero-rating of VAT on building safety works.
• Adequate funding for evacuation support.

To rebuild financial capacity while also investing in improving the future quality of social homes, the Spending Review should include:

• Funding to meet the requirements of an updated Decent Homes Standard, alongside clarity on standards and realistic implementation timescales.

To deliver the required improvements in decarbonisation and energy efficiency, alongside investment in new homes, the spending review should:

• Continue to fund the Warm Homes: Social Housing Fund in line with manifesto commitments and the NIC assessment – delivering £5bn in total investment by 2030.
• Ensure sufficient funding is made available to deliver the required investments in heat networks, particularly for the Heat Network Technical Assurance Scheme.

A new Affordable Homes Programme

Rebuilding financial capacity will mean housing associations can continue to borrow to invest in new homes. To deliver new homes this must sit alongside a new, long-term and ambitious Affordable Homes Programme that prioritises social rent and shared ownership, with higher grant rates to reflect the current operating environment. It should also include funding for regeneration, and transition funding to ensure no drop-off in delivery between programmes.

Saving supported housing

Supported housing helps half a million people in the community and is a vital part of a sustainable housing, health and social care system. But it is facing a financial crisis, exacerbated by the recent changes to National Insurance. To ensure a sustainable future for supported housing, we are calling for:

• Long-term and increased funding for housing-related support, clearly identifiable in consolidated funding allocations, starting with £1.6bn per year until a full assessment of need is undertaken.
• Reinstating the £300m Housing Transformation Fund, or an equivalent, to integrate health, social care and housing and deliver supported housing strategically.
• Committing to deliver at least 180,000 more supported homes by 2040, with clear funding in the Affordable Homes Programme, and making sure supported homes form part of the 1.5m homes target.
• Ensuring that the long-term housing strategy and homeless strategy recognise the vital role of supported housing in the housing system, and the long-term housing strategy specifically considers housing for older people.

Download our full response and a summary of our asks using the links below: