Affordable housing completions rise, but political instability risks hampering future activity
According to the latest statistics from Homes England on housing starts and completions, the number of affordable housing starts in the financial year 2025 to 2026 was 33,171, up by 12% on the previous year and representing 78% of all starts.
For the same period, affordable housing completion levels reached 32,243 up 14% on the previous year.
John Guest, National Head of Social Housing at RSM UK, said: “While the increase in affordable housing completions by 14% is a promising step in the right direction, there remains an urgent need for government investment in social housing. As rising demand increases the pressure to meet supply targets, ongoing political instability means there is much uncertainty over what support will be available to the sector, and the speed at which any much-needed measures will be implemented. Paired with the ongoing economic headwinds and heightened cost pressures due to the Middle East conflict, this could significantly impact long-term efforts to drive investment in the sector and improve the availability of affordable housing.
“The launch of HMRC’s long-awaited consultation to consider a new zero rate of VAT on the sale of land for social housing is a promising step towards understanding how current regulatory rules create barriers to the delivery of social housing. If the proposals go ahead, it could help to speed up delivery in the longer term and relieve long-term demand pressures. This follows the recent announcement of the Social Housing Renewal Bill in May, which included proposals to protect existing housing stock, reform Right to Buy and increase regulatory certainty helping to create more stability in the sector.
“However, there is still a way to go to meet affordable housing demand, with ongoing headwinds heightening the need for clarity and support in the near-term.”
Kelly Boorman, Head of Construction at RSM UK added: “With the latest construction PMI showing subdued activity, a further fall in sentiment and insolvencies on the rise, there is a clear and urgent need for investment to support long-term housebuilding efforts. While Starmer’s resignation is unlikely to impact short term project commitments, uncertainty over housing targets and policy changes could impact investment decisions, resulting in uncertainty around infrastructure and major project pipelines in the longer term. This is another significant blow to a sector already facing concerns around project viability amid heightened energy and material cost and pressures across the supply chain.
“There is uncertainty around what measures, if any, the new government will offer to support affordable housing projects. The launch of the National Housing Bank by Homes England in April offered a source of additional investment for the sector. However, with no clear end to the current economic and political uncertainty in sight, anticipated subdued investor appetite and a fall in house prices, there is a risk that these headwinds could have a negative impact on site developments and project mobilisations in the longer term.”