State of the UK housing nations

Posted: March 30, 2026 | Author: julesbirch | Filed under: Affordable housing, Social housing |Leave a comment

Originally written as a column for Inside Housing

What are the investment prospects for housing in the rest of this decade? What challenges lie ahead? And how do the different UK nations measure up to each other on affordable housing?

This year’s UK Housing Review (UKHR) offers all the statistics we’ve come to expect, plus commentary on everything from the rise of for-profit housing associations to the impact of the Right to Buy and from rising homelessness to falling social lettings. 

But my eye was drawn first to John Perry’s chapter on housing expenditure plans.

Ever since the launch of Help to Buy, the scope of his analysis has extended beyond conventional grant to encompass a growing number of loans and guarantees across tenures.

At the peak (or nadir) in 2017 a staggering 84 per cent of total support for housing over the next five years was going to the private market (£42.8 billion) with just 16 per cent for social and affordable housing (£8.2 billion). 

The bulk of that private support was in Help to Buy equity loans and mortgage guarantees and the total amount has fallen since the end of those schemes. 

Comparable analysis for last year’s UKHR showed that for the first time since then the majority of support over the five years (2020/21 to 2025/26) was going to social and affordable housing. 

The 2026 edition looks forward to the next five years from 2026/27 to 2029/30. In the wake of Labour’s ‘biggest boost in a generation’, 51 per cent of total funding will go to social and affordable housing (£21.7 billion) comprising £16.2 billion in grant, £2.5 billion in loans from the National Housing Bank and £3 billion for the Affordable Homes Guarantee Scheme.

Most of the remaining  49 per cent going to the private market (£21.2 billion) will be in grant, loans and guarantees for the National Housing Delivery Fund, alongside £1 billion in guarantees to support small housebuilders and £1.7 billion in debt guarantees to support build to rent. 

What feels significant is that all of that private investment will support supply whereas Help to Buy was also a big stimulus to demand. 

But with the housing market in general and housebuilding in particular in the doldrums, speculation is growing about a revival of Help to Buy in the Autumn Budget. That may seem unlikely and undesirable in the wake of the surge in housebuilder profits, dividends and executive pay that followed the original scheme, but many people are starting to see it as the least bad option if Labour is to come anywhere near to its 1.5 million homes target.  

On the social and affordable side of the ledger, it’s noticeable that the increase over the next five years is not as great as you might think. That’s because much of the increase in the Social and Affordable Homes Programme is backloaded into the 2030s.

The chapter also lays out in detail the challenges faced by providers, with the current 2021-26 Affordable Homes Programme set to under-deliver on its original targets. 

With starts faltering, especially in London, the chapter says it is likely that only half of the targeted completions will be delivered by the notional end date of April 2026, with the rest taking until at least 2028. 

A big factor in that is rising costs, with total scheme cost per home up another 13 per cent since 2024 at £242,000 outside London – but UKHR says it ‘remains disappointing’ that numbers are not available for the capital.

The future is looking brighter, with the SAHP targeting 300,000 affordable including 180,000 social rent homes over the next 10 years, but concerns remain:

• Fewer homes are being delivered on top of that via developer contributions, with Section 106 expected to account for 36 per cent of total affordable homes in 2024/25, down from 45 per cent the previous year. 
• Progress by local authorities is limited by the ‘precarity’ of Housing Revenue Accounts
• Low-interest loans to housing associations from the National Housing Bank will help but councils are not eligible and even with a preferential rate their loans from the Public Works Loans Board are much more expensive. 
• Even after that ‘biggest boost’ there will only be a modest increase in investment in the short to medium term, with total delivery of affordable homes expected to average 70,000 a year over the next three years. Analysis by Savills says 140,000 a year would be needed to hit the 1.5 million target.

As ever, the UKHR looks beyond England to what is happening in the other home nations.

In Scotland, the government has a target of 110,000 affordable homes over the decade to 2032, with at least 70 per cent for social rent. 

The target for 2025/26 is 8,000 but even that will leave a shortfall and housing organisations say 11,000 a year is no longer enough: they estimate need at more than 15,000 a year. 

The Welsh Government is set to meet is target of 20,000 low carbon homes for social rent by the end of this year rather than the original deadline of the end of the current Senedd term in April. 

Some 80 per cent of government support for investment in Wales goes to social and affordable housing, with just 20 per cent for the private market, most of it via Help to Buy Wales. 

The situation in Northern Ireland looks significantly worse, with the communities minister cutting grant rates in October after ‘hitting a brick wall’ with requests for additional funding. Restrictions on borrowing by the Housing Executive continue to be a problem.

The UKHR sums things up in a cross-UK comparison of housing investment plans. 

Looking at affordable housing delivery per 10,000 population since the financial crisis, Scotland has led the way. England was in a clear second place in 2007/08 but under Conservative-led governments it had slipped into last place by 2024/25. 

Wales has steadily improved its relative position over the last 10 years while Northern Ireland has fallen back but just retained second place.     

A cross-UK comparison of annual investment in affordable housing relative to population shows Scotland again in the lead (£2.9 million per 10,000 population), followed by Wales (£2.6 million) and then England (£2.1 million), with Northern Ireland bottom of the table (£1.6 million).

That’s just a flavour of what’s in this year’s UK Housing Review. It’s free to download and read in detail here. 

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