On Wednesday 26th March 2025, Chancellor of the Exchequer Rachel Reeves delivered a Spring Statement. What was supposed to be a simple financial update turned into a much more significant statement with the announcement of severe welfare budget cuts, amongst other things.
Rachel Reeves said Labour was elected to “bring change to our country, provide security for working people and deliver a decade of national renewal”.
The Chancellor’s announcement does not constitute an official budget—since Labour committed to providing just one annually—but serves instead as a review of the economic situation since her fiscal report last October.
Let’s go through what was said about the Housing sector, and what this means for the rest of the fiscal year.
What was said about Housing?
In the statement, Rachel Reeves continued the commitment Labour has promised towards house building and the sector, although admitted that they are likely to miss the manifesto pledge of building 1.5 million homes by the next general election.
The Chancellor said the government will still oversee 1.3 million new homes being built in the next five years, meaning they would be “within touching distance” of the previous pledge.
This means the government is promising to be on track to create 305,000 homes a year by 2030, with these planning reforms meaning a more than 40-year high in house building.
The government will also launch a construction training package to train up to 60,000 workers to build the homes, alongside investing an additional £2 billion into affordable housing with the Affordable Homes Programme.
The Chancellor said “the world has changed” since her first budget around five months ago, and that was the reason for the string of cuts she also outlined in the House of Commons.
Among the latest changes to the welfare budget , she said the universal credit health element would be cut by 50% and frozen for new claimants.
Additionally, around 800,000 people will not receive Pip, the daily living component personal independence payment, due the government tightening the rules for eligibility.
These welfare cuts will mean 250,000 more people, including 50,000 children, will be pushed into poverty by the end of the decade.
This is important for Housing to consider, as cuts to welfare will greatly impact tenants and mean the demand for affordable housing is even greater.
What does this mean for Housing, and the Sector response?
While the government is scaling back on their promises to the sector, it is clear they are still maintaining their commitment to building more houses, even if the target is being lowered, and may be lowered still.
The Office for Budget Responsibility (OBR) have said there are “several significant uncertainties” around their estimates towards building in the sector. It is important then for Housing to remain positive, but critical, surrounding the long-term plans of the government and the uncertainty that still remains in building affordable housing for all that need it.
The cuts of welfare are also alarming for the sector, and many are concerned about the growing rates of homelessness in the UK, and how these budget cuts will impact the most vulnerable. This is also creating further uncertainty in the future of social housing, and how it can support those in need.
The Housing sector is now awaiting the June Spending Review, to see what the government intends to deliver in the future and the more in-depth commitments they need to make towards social housing.
The extra funding towards the Affordable Homes Programme has been welcomed by Housing associations, but it is still uncertain about the government’s future intentions for the sector.
Kate Henderson, chief executive of the National Housing Federation (NHF), said the announcements in the statement showed that “delivering new social housing is intrinsic to the government’s plans for growth”.
“We hope to see a significant increase in funding for affordable housing at the Spending Review, alongside a package of support to help the social housing sector rebuild capacity, so we can build the homes we desperately need.”
Rachael Williamson, interim director of policy, communications and public affairs at the Chartered Institute of Housing (CIH), also welcomed the funding. But she noted that “the government will struggle to meet its target of building 1.5 million homes without significant investment in social and affordable homes”.
To learn more about the sector’s response, and what this means for Housing, we recommend this in-depth analysis from Inside Housing, which spoke to a wide variety of people within Housing about the Spring Statement.
How Convene can help your Housing Association
Housing Associations play an invaluable role in providing quality homes and creating communities. That’s why we’re proud of how many have chosen Convene to help fulfil their social purpose of housing people.
Here at Convene, we have over 200 clients in the Housing Sector, and we are dedicated to helping them achieve that all too important long-term stability.
That’s why software like our Board portal exists. Associations and their Boards need their meetings to run smoothly, and they need systems and software that facilitates this. Without access to relevant information easily, Boards cannot effectively administer their duties.
Our new partnership with GovernWith also allows you to assess your Board skills, and have an effective evaluation of your Board’s contemporary governance capabilities. If you want to learn more about that, book a meeting today.
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