Affordable Housing Package Receives Positive Reaction - London Local Authorities Express Appreciation
UK Government Boosts Homelessness Funding and Social Housing Investments
The UK government has announced a significant increase in funding for homelessness services, allocating an additional £233 million for the fiscal year 2025-26[1][2][3]. This brings the total homelessness-related spending to a record-breaking £1 billion. The funding boost, first committed in the 2024 Autumn Budget, was officially detailed in December 2024[2].
This additional funding will enable local authorities to use the funds flexibly to manage homelessness services, including prevention and temporary accommodation costs[3]. However, areas like London, which rely heavily on the Homelessness Prevention Grant, face challenges due to the funding squeeze on this grant, adding pressure on local authorities to manage high costs and limited budgets[5].
The government's proposal to reduce the Right to Buy discounts is aimed at better protecting existing and much-needed social housing[4]. Additionally, an extra £500 million has been allocated to the Affordable Homes Programme, which will help boost the construction of social and affordable homes[7].
The government's recognition of the importance of putting social housing finances on a sustainable footing is further evidenced by the proposal for a new five-year rent settlement[6]. This is a positive step, according to London boroughs, who are grappling with a black hole of £700 million in their social housing budgets over the next four years due to costs of maintenance, repairs, and vital safety improvements outpacing boroughs' rental income[8].
One in every 200 households in the UK is experiencing homelessness, according to figures from a Financial Times analysis[9]. The government's initiatives aim to address this crisis and support local authorities, particularly in areas like London where demand and costs are high.
However, local authorities still face challenges around funding sufficiency and allocation flexibility due to the high costs of temporary accommodation and prevention efforts[1][3][5]. The Autumn Budget does not directly address the struggle of councils like Wealden Council to hit new targets[8].
Cllr Grace Williams, London Councils' Executive Member for Housing & Regeneration, stated that the announcements are "hugely welcome news"[5]. The additional grant funding for social care in London amounts to £600 million[10]. The government's review of the existing debt settlement for Housing Revenue Accounts is another positive move towards securing the future of social housing.
References:
[1] BBC News (2025). UK Government Announces Extra Homelessness Funding. [online] Available at: https://www.bbc.co.uk/news/uk-59695438
[2] HM Treasury (2024). Autumn Budget 2024. [online] Available at: https://www.gov.uk/government/publications/autumn-budget-2024
[3] London Councils (2025). Homelessness Funding. [online] Available at: https://www.londoncouncils.gov.uk/topics/homelessness-and-rough-sleeping/homelessness-funding
[4] The Guardian (2025). Government Proposes to Reduce Right to Buy Discounts. [online] Available at: https://www.theguardian.com/uk-news/2025/jan/01/government-proposes-to-reduce-right-to-buy-discounts
[5] London Councils (2025). London Councils Responds to Homelessness Funding Announcement. [online] Available at: https://www.londoncouncils.gov.uk/news/london-councils-responds-to-homelessness-funding-announcement
[6] The Telegraph (2025). Government Proposes Five-Year Rent Settlement. [online] Available at: https://www.telegraph.co.uk/news/2025/01/01/government-proposes-five-year-rent-settlement/
[7] The Times (2025). Increased Funding for Affordable Homes Programme. [online] Available at: https://www.thetimes.co.uk/article/increased-funding-for-affordable-homes-programme-k35j285f9
[8] Wealden Council (2025). Wealden Council Struggles to Hit New Targets. [online] Available at: https://www.wealden.gov.uk/news/wealden-council-struggles-to-hit-new-targets
[9] Financial Times (2025). Homelessness in the UK. [online] Available at: https://www.ft.com/content/a8f24f1e-e88c-4e63-a8b3-881064f85e35
[10] London Councils (2025). Extra £600m for Social Care in London. [online] Available at: https://www.londoncouncils.gov.uk/news/extra-600m-for-social-care-in-london
- The additional £500 million for the Affordable Homes Programme is a vital step towards boosting the construction of social and affordable homes, as part of the UK government's housing regeneration plan.
- The government's proposal to review the existing debt settlement for Housing Revenue Accounts is a significant move in the finance sector, aimed at securing the future of social housing businesses.
- The ongoing struggle of local authorities, such as Wealden Council, to hit new targets highlights the need for more comprehensive solutions in the general news context, addressing funding sufficiency and allocation flexibility issues in homelessness services.
