High profile names in the lettings and sales industry have given broad support to Chancellor Rachel Reeves’ spending plans for housing.

She says some £39 billion will be spent over 10 years for local authorities, private developers and housing associations to create social housing. This average of £3.9 billion a year is a significant increase on the £2.5 billion allocated annually under the 2021-26 programme. 

Reeves told MPs social housing had been “neglected for too long – but not by this Labour government … A new Affordable Homes Programme – in which I am investing £39bn over the next decade. Direct government funding that will support housebuilding especially for social rent, and I am pleased to report that towns and cities including Blackpool, Preston, Sheffield, and Swindon already have plans to bring forward bids to build new houses.”

Social landlords to raise rents annually by 1% above the consumer price index rate of inflation, for the next 10 years: this doubles the five year rent rise period announced by Reeves last year. 

The government is also reported to be consulting on how to implement the return of rent convergence, which allows cheaper social rents to rise more quickly to ensure alignment between rents on different properties. It had been scrapped in 2015 by a former Conservative government. 

Alex Slater of Rightmove says: “Today’s news is a really positive boost for the housebuilding industry and a step in the right direction. There aren’t enough affordable homes, so we welcome any initiatives that will help the sector to deliver more of these homes to market. 

“What will be key is making sure more affordable homes are delivered in the right places, where the gap in supply and demand is greatest. Hopefully this is one of many steps to come to support the delivery of much needed homes across the country.”

Goodlord chief executive William Reeve comments: “This £40bn commitment could not come a moment too soon. The myriad pressures on the housing market – from rising rents and retreating landlords, to crumbling social properties and escalating numbers living in temporary accommodation – all of it stems back to a historic failure to ensure our housing stock keeps up with population growth. We need to focus all efforts on driving up the number of homes available and close a gap that’s been rising year-on-year.

“Today’s funding commitment is a key announcement for the market and includes other much needed reforms such as a sensible step forward on social rents and £10 billion for financial investments. The big hope is that this money, combined with planning reforms, will see the OBR’s forecast – that house building will hit its highest level in over 40 years by 2029/30 – come to fruition.”

And Richard Donnell, executive director of research at Zoopla, adds: “Increased investment in affordable housing is vital to support the ambitions to build 1.5m homes. The nation can’t spend its way out of the housing crisis and while more money is going in, the costs of development are rising faster than sales values which is reducing the viability of building homes. 

“Building the homes the nation needs requires the implementation of the full spectrum of planning reforms, more investment in affordable homes and further demand side support for new home buyers.”

Meanwhile David Campbell – chief operating officer at the National Home Building Council – says: “The target of 1.5m new homes by the end of this parliament is an ambitious one, which is why it’s important the potential of all tenures and all types of housing is maximised. The demand for affordable homes across the UK is acute, and it’s encouraging to see long-term targeted funding for this sector.’

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Non-housing announcements in Reeves’ speech – some leaked by the government in recent days – include: 

NHS: An extra £29 billion per year for “day-to-day” spending – a 3% rise for each year until the next election;

Artificial Intelligence: £2 billion spending on this as part of growth of research and development budget to £22 billion;

Law and Order: Another £2 billion to fund 13,000 extra police officers, PCSOs and special constables; £7 billion on 14,000 new prison places. 

Winter fuel: The government has partially reversed cuts to winter fuel payments, at a cost of £1.2 billion. Over three-quarters of pensioners will now get the payment;

Defence: Extra £11 billion of spending, going from 2.3% of GDP to 2.6% by April 2027, paid in part by cutting overseas aid. A pledge to increase defence spending to 3%, but without a hard date;

Asylum hotels: Housing asylum seekers in hotels will stop by the end of this Parliament in 2029; another £280m for enhanced border controls;

Schools: Core schools budget given extra £4.5 billion a year, of which half will be spent on “crumbling classrooms”, along with free school mealsexpanded to 500,000 children whose parents get Universal Credit, regardless of income;

Nuclear power: Government will invest £14.2 billion building the Sizewell C nuclear power station plus some smaller modular reactors;

Transport: £15.6 billion invested in trams, trains and buses in Greater Manchester, the Midlands, Tyne-and-Wear and the Oxford-Cambridge link;

Bus Fares: Capped at £3 outside of London until at least spring 2027;

Science: Some £86 billion to fund research into drug treatments and ‘green’ longer-lasting batteries.

Reeves says: “My driving purpose since I became Chancellor is to make working people, in all parts of our country, better off. So at the Budget last October and again in the spring, I made the choices necessary to fix the foundations of our economy.”

She says total department budgets will grow 2.3% in real terms and claims she is able to “allocate £190 billion more to the day-to-day running of our public services over the course of the spending review… compared to the previous government’s plans”.