More than forty thousand additional social homes that had plans in place to be built, remain unfunded following the government's allocation of grant funding for affordable housing, new analysis from the National Housing Federation (NHF) has found.
The analysis reveals that around 41,000 additional social homes outside London, including 25,000 homes for social rent[i], could be built had bids by housing associations to the government’s flagship Social and Affordable Homes Programme (SAHP) been fully funded.
In August the government committed £9.6bn of funding through the SAHP’s Strategic Partnership programme, supporting the delivery of 73,617 new social homes.[ii] However, several housing associations with strong delivery records either received less funding than they bid for or were unsuccessful altogether, despite having the capacity, sites and development pipelines in place to deliver new homes.[iii] Had these bids been confirmed, 56% more social homes could have been delivered, with 15,000 of the 41,000 additional homes ready to start construction on site in the next three years, including 9,000 homes for social rent.
There is a similar funding shortage in London. Last week London Councils revealed its members alone had bid for more funding than the total available London SAHP allocation, without taking into account bids from housing associations and private developers.[iv]
As a result, significant pressure will be placed on the Continuous Market Engagement (CME) route of the SAHP - where funding is bid for on a scheme-by-scheme basis. This pot will now be relied on to deliver homes that missed out on the first wave of Strategic Partnership funding, as well as additional bids from councils and housing associations for new homes and vital regeneration projects.
The government has implied that a significant proportion of the remaining SAHP funding will be allocated in later years of the programme, putting homes ready to be delivered now at risk.[v] In order to deliver the government’s commitment of the largest council and social housebuilding programme since the post-war era, both housing associations and councils will need to work in partnership and both be delivering social homes at maximum capacity.
The NHF estimates that an additional £5.3bn of grant funding over ten years is needed to unlock the 41,000 additional social homes. This funding would also protect land and contractor commitments, sustain jobs across the supply chain and maximise the contribution of housing association.
As well as providing homes more quickly for the thousands of families in desperate need of a secure and affordable place to live, the construction of 41,000 more social homes would add £6.86bn to the economy, support 93,000 jobs and help prop-up the construction industry at a time when private development is facing significant challenges. The management of the homes would add a further £430m to the economy every year at today’s prices, supporting an additional 4,400 jobs.[vi]
Alongside boosting growth, these homes would result in an annual saving of £109m in housing benefit costs.[vii] The 25,000 social rent homes would reduce wider public expenditure, generating an annual saving of £291m to the exchequer through reduced health and other costs. There would also be significant savings to councils, who spent nearly £3bn in temporary accommodation costs last year.[viii]
Latest new build figures show that housing associations have rebuilt their development capacity following recent government support and are already ramping up delivery. Housing associations built 1 in 4 new homes in England last year and more social rent homes than in over a decade.[ix] In addition, social rent starts increased by 57% in the year to March 2026.
Ahead of the Autumn Budget, the NHF, the Chartered institute of Housing, the Local Government Association, the Association of Directors of Housing, the Council with ALMOs Group, and the Northern Housing Consortium, representing the social housing sector, is calling on the government to:
- Commit to making additional SAHP funding available in the early years of the programme to ensure councils and housing associations can build to maximum capacity during this parliament and over the next decade.
- Confirm the details of the low-cost loans promised at the last Spending Review, ensuring low-cost funding is available to both housing associations and local authorities.
Kate Henderson, Chief Executive of the National Housing Federation, said:
"There are thousands of social homes sitting in council and housing association development pipelines that can be built if grant funding is made available. Councils and housing associations have a long track record of working in partnership to deliver the homes their communities need and together stand ready to do much more."
"The recent Strategic Partner programme showed the scale of ambition across the sector. Housing associations submitted bids with plans to build tens of thousands of affordable homes, but many organisations with sites ready to go and proven track records did not receive the funding needed to deliver these homes."
"With additional investment now, it is possible to help transform the lives of families in urgent need of an affordable home. At the Autumn Budget, the government has an opportunity to unlock tens of thousands more social homes and deliver the biggest increase in social housebuilding in a generation."
Ms Abena Oppong-Asare MP, Chair of the Housing, Communities and Local Government (HCLG) Committee said:
“The government should use the upcoming Budget to increase the building of social homes by ensuring a significant proportion of the Social and Affordable Homes Programme is allocated during this Parliament.
“Families stuck on social housing waiting lists need to see action now. I urge the Chancellor to ensure a significant sum of the £39bn SAHP is allocated during this Parliament and that truly affordable Social Rent homes are prioritised as part of this package”.
Gavin Smart, Chief Executive of the Chartered Institute of Housing (CIH), said:
“CIH welcomed the first wave of Social and Affordable Housing Programme funding, particularly the focus on social rent and support for council housebuilding. The sector was asked to be bold in its bids to help tackle the country’s acute housing need — and it stepped up, delivering ambitious plans for new social and affordable homes.
“We are now calling on government to maintain that momentum and support these strategic partnership bids, enabling delivery to get underway and helping to realise the government’s social housing ambitions during this Parliament.
“Bringing forward more funding into the early years of the programme would enable housing associations and councils to deliver more homes, more quickly. This would help reduce spending on temporary accommodation, cut council waiting lists and give more families the stability of a home of their own.
“It would also ensure sufficient funding is available in the early years to meet demand for Continuous Market Engagement (CME) — a vital funding route for councils and smaller housing associations as they build their programmes, increase capacity and deliver more social homes.”
Geoff Beales, Chair of the Councils with ALMOs Group, said:
"These figures demonstrate the scale of the opportunity being missed. Councils, ALMOs and housing associations have homes ready to build, but without the funding to unlock them, thousands of families will remain waiting for a secure, affordable home.
“At a time when councils are facing record homelessness and temporary accommodation pressures, investing in social housing is one of the most effective ways to reduce demand on public services while delivering lasting benefits for communities.
“Government has set an ambitious target for housebuilding. To achieve it, councils and housing associations must have the funding certainty needed to bring forward the thousands of homes that are already in the pipeline."
Hakeem Osinaike and Glyn Halksworth, Co-Chairs of the Association of Directors of Housing, said:
“We share the government's ambition for everyone to have access to a secure, affordable home and strongly support the pledge to end rough sleeping.
“Councils and housing associations are both essential to delivering the genuinely affordable homes our communities need. Strong partnerships between the two sectors will remain vital if we are to meet the scale of the housing challenge.
Increased long-term investment across the affordable housing sector is essential to enable delivery at scale and meet growing demand. Both councils and housing associations need the certainty and resources to plan, invest and build more homes for current and future generations.
“With the right funding and policy framework, councils and housing associations can make a significant contribution to tackling the housing crisis and helping deliver the Prime Minister's vision of a decent, affordable home for everyone.”
Janet Sharpe, Chief Executive of the Association of Retained Council Housing (ARCH), said
"So far, only a small number of councils have been given their allocations as strategic partners in the SAHP, but there are many more standing ready and prepared to build at scale. Our members, working with the government, want to see a revolution in council housing supply; and are keen to see the funding levels awarded to support them."
Patrick Murray, Executive Director (Policy & External Relations) of the Northern Housing Consortium, said:
"The social housing sector in the North stands ready to deliver. We are well placed to build on the devolution agenda with established Mayoral Strategic Authorities in many places in the North. There is a strong track record of councils, housing associations and the Mayors’ teams working together to deliver more homes, better places, and unlock jobs.
“But we need all partners able to play their full part, including housing associations. Providing additional funding in the next few years will deliver more much-needed social housing across our communities, including through supporting regeneration which is vital to unlocking good growth in every postcode."
Councillor Carl Cashman, Chair of the LGA’s Inclusive Growth Committee, said:
“The country desperately needs more homes – in particular, social and affordable housing, and the SAHP is an important vehicle with the potential to help deliver these.
“However, unless it is sufficiently funded, then it could impact how well councils – who have a pivotal role in helping deliver the homes we need - can play their part in achieving our shared housing ambitions. We’re calling on government to support the acceleration of delivery of social rented homes by revising grant levels available per unit through the SAHP at the Autumn Budget.”
ENDS
Notes for Editors:
The National Housing Federation is the voice of affordable housing in England. We believe that everyone should have the home they need at a price they can afford. That’s why we represent the work of housing associations and campaign for better housing.
Our members provide over two and a half million homes for six million people. And each year they invest in a diverse range of neighbourhood projects that help create strong, vibrant communities.
For more information visit: www.housing.org.uk
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[i] Based on data from 18 housing associations. Does not capture all organisations that were unsuccessful in securing their full funding allocation.
[ii] Historic council housebuilding comeback to help families into secure homes - GOV.UK
[iii] Homes England and government confirm strategic partners set to help deliver once-in-a-generation increase in social and affordable homes across England - GOV.UK
[iv] Inside Housing - News - London councils target more than 50,000 homes in bids ahead of SAHP confirmation
[v] In its policy paper published in August 2026 the government said: “…there is over £16 billion of funding outside London and around £5 billion in London still yet to allocate. This includes funding in each year of this Spending Review period (2026 to 2030) and significant sums in the second half of the Programme.
The Social and Affordable Homes Programme and the reinvigoration of council housebuilding - GOV.UK
[vi] The economic impact of building social housing - CEBR
[vii] Based on an annual per household saving of £11,634 as identified in CEBR, The Economic Impact of Building Social Housing, 2024
[viii] Temporary housing costs councils £8m every day in new record high | The Independent
[ix] The NHF collected data from 154 of its members, including 46 of the top developing housing associations as part of its supply survey. This represents the vast majority of new development by housing associations.
