Archive · 25 Aug 2026
UK Unveils First £10 Billion Wave of Low-Cost Housing
The UK government is starting a large programme to build cheaper homes for renters.
The whole programme is planned to receive £39 billion over 10 years.
The first phase will provide £10 billion in funding.
About 60% of the homes are expected to have social rents, which are cheaper rents supported by councils or housing associations.
More than £7 billion of this first funding phase will go to London.
The first wave should help build more than 70,000 homes.
Prime Minister Burnham wants local councils to build most of the social housing.
However, Housing Minister Matthew Pennycook says councils are not yet ready to manage the whole programme.
The UK government has launched the first £10 billion phase of a £39 billion, 10-year lower-cost housing programme.
Around 60% of homes funded will be for social rent, matching the previous government’s target.
More than £7 billion of the first funding tranche is earmarked for London.
The first wave is expected to support construction of more than 70,000 new homes.
Prime Minister Burnham wants councils to lead social housing construction, while Housing Minister Matthew Pennycook says councils currently lack the capacity to deliver the entire programme.
- Who
- The UK government, Prime Minister Burnham, Housing Minister Matthew Pennycook, local councils, housing associations and mayoral authorities.
- What
- The government launched the first £10 billion phase of a 10-year, £39 billion lower-cost housing programme.
- When
- The first funding wave was announced on Tuesday, following a statement from Burnham late on Monday.
- Where
- More than £7 billion is earmarked for London, with additional funding planned outside the capital.
- Why
- The programme is intended to increase lower-cost and social-rent housing, reduce reliance on private landlords for welfare payments, reduce homelessness and provide greater security for lower-income renters.
Council-led housing
Capacity-based delivery
Who should build the homes?
Council-led housing
Prime Minister Burnham argues that local councils should be empowered and trusted to build social housing, as councils did after World War Two.
Capacity-based delivery
Housing Minister Matthew Pennycook says councils do not yet have the capacity to take on the entire programme.
Share of social-rent homes
Council-led housing
Burnham had pledged to deliver all housing under the programme through local councils.
Capacity-based delivery
The government’s first phase will provide around 60% of homes for social rent, matching the previous government’s target rather than Burnham’s broader pledge.
Local decision-making
Council-led housing
The programme is presented as supporting devolution by giving mayoral authorities strategic control over housing in their areas.
Capacity-based delivery
The initial funding will be distributed through a staged approach, with London receiving more than £7 billion and capacity influencing how the programme is delivered.
- Total programme
- £39 billion over 10 years
- First phase
- £10 billion
- Social-rent share
- Around 60% of homes
- London allocation
- More than £7 billion in the first tranche
- First-wave output
- More than 70,000 new homes
- Funding outside London
- More than £16 billion over time
- Delivery focus
- Social rent homes and council house-building