Chancellor Rachel Reeves has announced a significant £2 billion funding boost aimed at constructing up to 18,000 new affordable homes in England, as part of a strategy to tackle the ongoing housing crisis.

This initiative is part of a broader government commitment to build 1.5 million new homes over the next five years, with experts suggesting that 90,000 of these must be social homes to meet the target.

Housing charities have welcomed the funding announcement, emphasizing that a substantial portion of the new homes should be designated for social rent to effectively address rising homelessness.

The funding represents the largest boost to social and affordable housing in a generation, with construction expected to begin before March 2027.

The urgency for this initiative is underscored by the fact that local authority waiting lists for social housing in England reached a decade-high of over 1.3 million households in 2024.

Amid these developments, Prime Minister Keir Starmer has sought to reassure the public that there are no plans to fundamentally alter public spending, despite anticipated cuts in the upcoming spring statement.

The spring statement is expected to reveal spending cuts across various government departments, including potential reductions in welfare and the digital services tax.

Reeves characterized the funding as a 'down payment from the Treasury,' with further long-term investments in social and affordable housing anticipated later in 2025.

Chancellor Reeves highlighted that this boost to housebuilding will not only address housing shortages but also create jobs and economic opportunities for working people.

Construction of these affordable homes is projected to start by March 2027 and be completed by July 2029, with development sites identified in major cities like Manchester and Liverpool.

This investment is seen as a crucial step to alleviate the impact of spending cuts and improve housing availability in the face of a tight financial situation, with the Office for Budget Responsibility projecting a budget deficit of around £5 billion.

The announcement comes as Bank of England Governor Andrew Bailey has pointed out significant challenges to reviving economic growth in Britain, highlighting the need for effective measures to stimulate the economy.