The UK government has announced a major funding boost for social and affordable housing in London, with the capital set to receive up to £11.7 billion over the next ten years through the

Social and Affordable Homes Programme. This represents 30% of the total national allocation and will be used to deliver new homes for families on lower incomes.

Previously, under the 2021–2026 Affordable Homes Programme, London was allocated £4.16 billion over five years—about £832 million annually. The newly announced funding increases that yearly average to £1.17 billion over a ten-year period.

Cllr Grace Williams, Deputy Chair and Executive member for Housing & Regeneration at London Councils, said:

“London is resolutely pro-housing growth. Since 2018, boroughs have directly started more than 25,000 new council-led homes.

“This investment – the largest ever for the capital in cash terms – will support us to build more of the social and affordable homes that our residents are crying out for. We welcome the long-term certainty that this ten-year programme provides, alongside the additional funding flexibilities for Right to Buy receipts.

“With 1 in 50 Londoners homeless and living in temporary accommodation, we know that more needs to be done to turn the tide against homelessness in the capital and across the country. Our city is the epicentre of the national homelessness crisis and the majority of homeless households in England are London families.

“Boroughs will continue to work together and with partners – including national government and the Mayor of London – to ensure we have the policies and funding needed to deliver social and affordable housing in the capital.”

Alongside the funding announcement, the government has confirmed a ten-year rent settlement for the social housing sector. Rents will rise annually by the Consumer Prices Index (CPI) plus 1%. A consultation has also been launched on reintroducing rent convergence—a policy supported by London Councils. Originally in place from 2002 to 2015, rent convergence aimed to standardise social housing rents across similar properties by considering local incomes and property values. In London, it helped better align rents with the actual costs of managing housing in the capital.

Additionally, changes to the Right to Buy scheme will now allow local authorities to combine proceeds from council home sales with Affordable Homes Programme grant funding. London Councils have long called for this flexibility to help meet the city’s housing needs.