Britain outlines £10 billion lower-cost housing plan focused on London

London, United Kingdom. Britain has set out plans to spend £10 billion ($13.6 billion) on lower-cost housing for renters, with the first phase focused on London. Around 60 per cent of homes delivered through the funding will be for social rent.

Funding allocation

The government said more than £7 billion from the first tranche of a previously announced £39 billion, ten-year funding programme would be allocated to the capital.

Local authorities in London are expected to deliver more than half of the new homes under the first phase. The financing is intended to support the construction of more than 70,000 homes.

Over time, more than £16 billion of the total funding plan will be allocated outside London, with the government saying it would prioritise social rent homes and council house-building.

Social rent target

Social rent is a subsidised, lower-cost form of housing that can be built by local councils or housing associations.

The planned 60 per cent share was in line with the proportion set out by the government of former Prime Minister Keir Starmer, which created the programme. It was below Prime Minister Andy Burnham’s pledge to deliver all housing under the programme through local councils.

Burnham, who took office in July, has said that enabling local councils to build social housing, as Britain did after World War Two, could reduce welfare payments to private landlords, lower homelessness and provide greater security for lower-income households.

“Councils built this country out of a housing crisis once before. Backed properly, and trusted to get on with it, they will do it again,” Burnham said in a statement late on Monday announcing details of the first wave of funding.

Local authority capacity and devolution

Housing minister Matthew Pennycook said councils did not yet have the capacity to take on the entire programme.

The government said the house-building programme would also support Burnham’s devolution policy by giving mayoral authorities the power to set strategic direction in their areas.