First £10bn of landmark social housing fund signals the return of council housebuilding

For years, councils have been largely spectators in the business of building homes. That changes this week: on 25 August, the Prime Minister and Housing Secretary Angela Rayner announced the first wave of funding from the government's £39 billion Social and Affordable Homes Programme, with nearly £10 billion now allocated. The timing could hardly be more pointed. With almost 180,000 children currently growing up without a permanent home, and families languishing in temporary accommodation or stuck on waiting lists that can stretch to a decade, the promise is that this money will finally put safe, secure homes within reach of those who need them most.

The headline numbers are substantial. Some £9.58 billion is going to 33 Strategic Partners outside London — councils, housing associations and other providers — to deliver 73,600 new social and affordable homes across England over the next ten years. Around 60% of these homes are expected to be for Social Rent, the most affordable form of rented housing, with rents typically set well below private market levels. Crucially, councils will hold Strategic Partner status with Homes England alongside housing associations, formally restoring them to the heart of national housebuilding — a role they have not occupied at scale for decades.

Devolution is woven into the design. Over £2 billion of today's funding is expected to be spent in Mayoral areas outside London, where Established Mayoral Strategic Authorities are setting the strategic direction so investment reflects local priorities. The regional breakdown shows the spread: Greater Manchester is estimated to spend £529 million supporting around 4,400 homes, the North East £445 million for roughly 3,400, West Yorkshire £441 million for about 4,000, the West Midlands £409 million for some 3,200, Liverpool City Region £380 million for around 3,100 and South Yorkshire £249 million for approximately 2,200. More funding is expected to flow directly to mayoral authorities as the programme matures, part of a wider shift of power out of Whitehall.

London, meanwhile, is set for a major boost reflecting the acute affordability crisis in the capital. The Greater London Authority intends to offer at least £6 billion through the programme, with councils expected to deliver more than half of the homes funded there. London's Mayor has pointed to record council homebuilding in the city while acknowledging that the number of families and children without a permanent home remains unacceptable — and argues the capital already demonstrates what local leaders can achieve with genuine control over housing investment.

The package also tackles the practical barriers that have historically tripped up council building programmes. Councils received £1.61 billion from Right to Buy sales in 2025/26, all of which can now be retained and reinvested in new social and affordable homes. A further £46 million of 'Capacity to Build' funding over three years will strengthen councils' skills and expertise, continuing the Council Housebuilding Support Fund run with Homes England, the Local Government Association's free advisory service, and an expanded Pathways to Planning graduate scheme to recruit surveyors and construction project managers. Section 106 agreements, the government confirms, remain an essential delivery mechanism alongside grant funding.

The sector has responded warmly, but not uncritically. Housing associations describe the confirmation as a vote of confidence in their distinct, long-term role, noting the scale and ambition of the bids they submitted. Council representatives welcome the allocation and the Capacity to Build money but stress that councils must remain at the heart of delivery, that mayors should work closely with local authorities, and that sustained access to preferential borrowing rates will be vital for viability. Rayner, for her part, framed the mission in personal terms, saying a safe and secure home was the foundation that allowed her to get where she is today.

For renters and families on waiting lists, the honest caveat is that this is a ten-year programme, not an overnight fix — more than £16 billion is still to be allocated outside London, with the government intending to prioritise Social Rent homes and council housebuilding in future rounds. But the direction of travel is clear: this forms part of the wider commitment to deliver 1.5 million homes this Parliament, including the biggest boost to council and social housing in a generation. If delivered at pace, sector bodies believe it can reduce homelessness and ease pressure on temporary accommodation. For landlords, developers and providers, the message is equally clear — long-term funding certainty is back, and the partners who can build at scale will be in demand.