Policy paper

January 2026 progress update: Delivering a decade of renewal for social and affordable housing

Updated 28 January 2026

Applies to England

In July 2025, the government published its 5-step plan to deliver a decade of renewal for social and affordable housing. This plan committed to delivering the biggest increase in social and affordable housebuilding in a generation, alongside a transformational and lasting change in the safety and quality of social housing.

This progress update sets out the action we have taken since July – working jointly with social housing providers across the country – to drive forwards the reforms we outlined across the 5 steps of our plan. Further and wider reforms to the housing market will be set out in our Long Term Housing Strategy.

Step 1: Deliver the biggest boost to grant funding in a generation

In July, we confirmed the headline parameters of the new 10-year £39 billion Social and Affordable Homes Programme (SAHP), to kickstart social and affordable housebuilding at scale across the country.

In November, the Greater London Authority and Homes England published their detailed prospectuses for this fund, for London and the rest of England respectively, alongside government’s policy statement for the programme. This re-confirmed the programme’s core supply objectives – our ambition is to deliver around 300,000 social and affordable homes over the programme’s lifetime, with at least 60% for Social Rent. 

Bidding for the new SAHP will open in February 2026. Ahead of this, we have heard clearly from providers that they need certainty about future rent policy and their regulatory costs before they can finalise and maximise the ambition of the bids they submit. The rest of this progress update seeks to provide this certainty before SAHP bidding opens. We encourage providers to now firm up bold and ambitious bids.

Step 2: Rebuild the sector’s capacity to borrow and invest in new and existing homes

We announced in July our commitment to rebuilding social housing providers’ financial capacity, to unlock greater investment in new and existing social homes.

Rents

The government remains committed to providing a stable rent policy for social and affordable housing that supports investment in new and existing homes, with the right protections for existing and future tenants and for public spending.

The 10-year settlement announced at the Spending Review, which allows landlords to raise rents annually by CPI+1%, gives the sector long-term certainty. Last summer, government consulted on how to implement Social Rent convergence to address the disparity between actual Social Rents and formula rents. This would allow rents for Social Rent properties that are currently ‘below formula’ (i.e. lower than the usual maximum that may be charged when a property is let to a new tenant) to increase by an additional amount, over and above the CPI+1% limit, up to formula level. This would increase providers’ financial capacity to invest in new and existing homes.

Having reviewed submissions to the consultation, government has now published its response, confirming that providers will be able to increase weekly rents for their Social Rent properties that are below formula by up to an additional £1 on weekly rents each year over and above CPI+1% from 1 April 2027, and by up to an additional £2  on weekly rents each year over and above CPI+1% from 1 April 2028, until formula rent is reached.

This decision has taken careful account of the impact on rent payers and the implications for public spending, as well as the benefits to the supply and quality of social and affordable housing. Convergence will only result in a tenant paying more where their rent is below formula rent – i.e. below the maximum that could be charged if their Social Rent property was re-let to a new tenant. Around two-thirds of households living in the social rented sector in England receive support to pay their rents through Housing Benefit or the housing element of Universal Credit. The approach to implementing convergence restricts increases to an extra £1 to £2 on weekly rents each year, which will provide a gradual path for rents to converge over time. Tenants will benefit where convergence results in higher levels of investment by providers to deliver improvements to the quality and energy efficiency of their homes. We have also considered the interests of households who would benefit from more social and affordable homes being delivered – such as those who are currently trapped in Temporary Accommodation or unaffordable and/or unsuitable privately rented housing. We believe this outcome strikes the right balance overall.

Building safety

At the Spending Review in June 2025, government announced over £1 billion of new investment between 2026-27 and 2029- 30 to accelerate remediation of social housing. We are giving social landlords equal access to remediation funding, helping them to make homes safe more quickly, while also helping them to supply more of the social and affordable homes that the country needs.  To complement the financial support announced in the Spending Review, we have developed a Joint Plan comprising a series of commitments from government, social landlords, and the Building Safety Regulator and Regulator of Social Housing. These commitments are designed to accelerate remediation activity across the sector. Under the Joint Plan, social landlord signatories have committed to, among other things, identifying and remediating buildings faster – in line with the Remediation Acceleration Plan – and improving outcomes for residents. 158 social landlords covering over 99% of social sector buildings requiring remediation have committed to the Joint Plan.

Low-interest loan scheme

At the Spending Review, we confirmed that government will be making available £2.5 billion of low-interest loans over 4 years (2026 to 2030), to support the delivery of social and affordable housing.

The loans will be made available to Private Registered Providers of social and affordable housing (including For-Profit Registered Providers)^{[footnote 1]}. They will be administered by the National Housing Bank (Homes England), and by the Greater London Authority (GLA) in London, with £1.5 billion allocated to London.

The loans will be available at an interest rate of 0.1%. They will have a duration of 25 years and can be repaid through a single bullet repayment. The loans will be unsecured and subordinated, and will sit at corporate level.

The loans will be used to deliver the same social and affordable tenures and strategic priorities as funding under the Social and Affordable Homes Programme (SAHP), and we anticipate the eligibility criteria will also be similar to the criteria for Private Registered Providers applying for SAHP funding. Loans will be made available via a competitive bidding process. This will follow confirmation of initial grant allocations made through the SAHP. Ahead of the allocation of SAHP grants, we will ask providers to indicate their interest in bidding for a loan. As we expect there to be strong demand for the loans, we will employ robust eligibility and assessment criteria, including minimum and maximum loan sizes. We will confirm these thresholds in the coming months, but we anticipate loans will be prioritised where these will result in a substantial increase in the number of homes that a provider can deliver. We will also seek feedback on whether they could also be useful for other types of schemes.  

We expect providers to submit ambitious grant bids for the SAHP when it opens next month, with the loans intended to secure additional homes over and above those delivered with SAHP grant funding alone. It will be possible to deliver the additional homes using a combination of a loan and additional SAHP grant funding that will need to be applied for after providers have been allocated an initial SAHP funding allocation. Given the small size of the loan scheme relative to the SAHP, we expect the amount of SAHP funding accessed alongside the loans to be a small proportion of the £39bn.   

There will also be an opportunity to bid to use low-interest loans to acquire Section 106 homes. Up to 10% of the £2.5bn will be available to support the delivery of social and affordable homes via this route.

We will confirm further details in the coming months. The introduction of the low-interest loan scheme will entail the completion of the Competition and Markets Authority subsidy control process.

Section 106 (S106)

S106 agreements are, and will remain, an essential mechanism for delivering social and affordable housing. They account not only for a significant proportion of affordable home completions, but also a significant share of total new home delivery. Without them, the development pipeline as a whole is at risk of contracting sharply.

However, in recent years, the negotiation of S106 agreements has become synonymous with inefficiency and delay. To ensure the developer contributions system secures the supply and affordability outcomes we seek in the years ahead, we need to reduce its complexity and minimise negotiation friction. The government is therefore taking steps to lay the foundations for a simpler, more transparent and more resilient S106 system.

In the short term, we need to address the detrimental consequences of the declining market for S106 affordable homes experienced over recent years. That is why the government is acting to deal with the thousands of constructed or consented S106 units that are currently uncontracted as a result of the sharp drop off in demand for S106 units over recent years. Doing so will help expedite the build out of development sites across England and minimise the disruption to both affordable and wider housing supply.

Accordingly, government has published a roadmap, which confirms that:

• The government expects all local planning authorities (LPAs) to adhere to a new emergency, time-limited approach to uncontracted S106 units, where developers can demonstrate that no Registered Provider is willing to purchase them. The approach builds on existing planning flexibilities available to LPAs and will require all S106 homes to be registered on Homes England’s Clearing Service before any tenure change is agreed, to ensure we have clear sight of the scale of the challenge.

• The government will work to provide greater clarity and certainty to facilitate the more effective delivery of S106 homes. Through new guidance we will seek to foster early engagement and collaboration between developers and RPs; provide greater clarity on the standards S106 homes must meet and the role that should be afforded to RPs in ensuring S106 homes meet the standards required of social and affordable housing; and encourage standardisation across the market in respect of how pricing is negotiated so as to provide more certainty for RPs and developers on what they can expect to pay and accept for S106 units.

• The government will take additional steps to expand financial capacity to revive the market for S106 homes supporting demand by boosting the capacity of Registered Providers to purchase S106 homes, setting a clear expectation of ongoing S106 delivery alongside grant, including collecting data through the SAHP bidding process on numbers of homes being delivered through S106. Up to 10% of the £2.5 billion low-interest loan scheme for Private Registered Providers will be available to support the delivery of social and affordable homes via S106. Alongside this, building on the Affordable Homes Guarantee Scheme 2020 and confirmation of its use for S106, we will explore a greater role for government in crowding in additional private investment to enable the purchase of S106 homes. We are also proposing changes to National Planning Policy through the recently published NPPF consultation,  to add military affordable housing to the definition of affordable housing, and allow military housing to be delivered as part of affordable housing requirements– including ensuring MoD have access to S106 homes. The consultation will be open until 10 March 2026.

We will set out further detail in due course with the intention of this full reset being in force in Spring 2026.

Step 3: Establish an effective and stable regulatory regime

Building new homes is vital – but we must also ensure that the 4 million existing social homes are safe, decent and warm. In July’s Decade of Renewal plan, we set out our intention to implement new requirements on social landlords, enshrining the safety of tenants at the heart of the sector, and ensuring that the decency and quality of social homes continue to improve. We have confirmed the details and next steps landlords will need to take to deliver this.

Decent Homes Standard (DHS)

The DHS is central to ensuring that tenants in the social rented sector have a good quality home – but the current version is out of date and no longer works for tenants nor our ageing housing stock. In July 2025, we published a consultation on an updated standard.

Having listened carefully to views across the sector and analysed consultation responses, government has now published its response to this consultation, and an associated policy statement and impact assessment. The new DHS will apply to social and private rental tenures from 2035, allowing landlords time to plan carefully to implement the changes.

The new DHS has been designed to reflect modern expectations of rented homes and improve health outcomes for tenants.  It prioritises safety, decency and warmth and will act as a common standard for both private and social rented housing.

Following consultation, the new DHS will focus on the condition as the primary factor when determining compliance of building components such as windows and roofs. It will go further in ensuring that rented homes are provided with good quality facilities such as kitchens and bathrooms, and introduce safety measures such as mandatory child-resistant window restrictors, which help to prevent tragic falls and give parents greater peace of mind, and more proactive and preventative approaches to addressing damp and mould.

Having carefully considered the consultation feedback, we will not introduce a mandatory floor coverings requirement or enhanced home security regulations, nor will we ask landlords to meet repair standards within the public realm. We think this balances the cost implications of improving the quality of existing rented homes with the need to increase affordable and social housing supply. Increasing supply will help move people, including many vulnerable children, out of unsuitable temporary accommodation.

Whilst some social rented sector landlords have said they are already providing floor coverings, the government recognises that too many residents struggle to provide their own basic furnishings. Therefore, we will work with landlords and tenants to rapidly identify cost-effective ways in which landlords can better support tenants in need.

A full government consultation response and policy statement has been published, setting out details of the new standard. Further guidance will be published to support early action and compliance with this standard.

The core details of the new DHS are as follows: 

Criterion A - A home must be free of the most dangerous hazards

To meet this criterion, properties must be free of ‘category 1’ hazards, as assessed under the Housing Health and Safety Rating System (HHSRS).

Criterion B - A home must be in a reasonable state of repair

Homes will fail against this criterion if:

• one or more key building components is not in a reasonable state of repair
• two or more other building components are not in a reasonable state of repair

Criterion C - A home must provide core facilities and services

To meet this criterion, flats must provide at least 3 of the following facilities:

• a kitchen with adequate space and layout
• an appropriately located bathroom and WC
• adequate external noise insulation and
• adequate size and layout of common entrance areas for blocks of flats

To meet this criterion, houses must provide at least 2 of the following facilities:

• a kitchen with adequate space and layout
• an appropriately located bathroom and WC
• adequate external noise insulation

Homes must also be equipped with child-resistant window restrictors, which can be overridden by an adult, on all windows which present a fall risk for children.

Criterion D - A home must provide thermal comfort

To meet this criterion, homes must provide a reasonable degree of thermal comfort. This includes ensuring homes meet Minimum Energy Efficiency Standards.

Criterion E - A home should be free of damp and mould

Homes will be non-decent if a landlord has not remediated damp and mould.

Minimum Energy Efficiency Standards (MEES)

In July 2025, we published a consultation on introducing new Minimum Energy Efficiency Standards for social and affordable housing, to encourage building improvements that make homes warmer, energy bills cheaper, and help reduce emissions from the sector. This required providers to meet an Energy Performance Certificate (EPC) ‘C’ rating against two of the post-reform EPC metrics (Fabric Performance, Smart Readiness or Heating System) by 2030.

We have published the final standard with a full government response to this consultation and impact assessment to follow shortly. To comply with MEES, social homes must have an Energy Performance Certificate (EPC) ‘C’, using reformed EPCs, against any one EPC metric, at landlord discretion, by 1st April 2030. Where properties have insufficient fabric insulation, we encourage providers to prioritise compliance via fabric upgrades. However, where other metrics could provide greater benefits to tenants - for example greater bill savings - social housing providers will have the flexibility to choose them.  

Using the reformed EPCs, social and affordable housing providers must then achieve an EPC C rating, against a second EPC metric by 1st April 2039 (from the list above) or for a valid exemption to be registered. Compliance will be monitored by the Regulator of Social Housing in line with the rest of the DHS.

This approach recognises the unique role that social landlords have in improving the energy efficiency of homes and increasing the supply of social and affordable housing at the same time, It means that all social households can expect a good level of energy efficiency from their homes  by 2030, with further upgrades to decarbonise the sector being installed before 2039. This means social housing providers can invest with confidence now towards meeting our objectives on reducing fuel poverty and carbon emissions and increasing social and affordable housing.

To aid the transition to the new EPC system, a transitionary period will also apply until 1st April 2030. This means that properties that meet the current EPC ‘C’ standard under the Energy Efficiency Rating (EER) methodology during this period, and have a valid EPC certificate that demonstrates compliance, will also be considered compliant with MEES for the duration of the validity period (10 years) of their EPC. We expect the majority of homes at EPC EER C will be compliant with one or more of the post reform metrics. A £10,000 ‘spend exemption’ will also apply and further detail on exemptions and policy details will be set out in the full government response to follow shortly.

This new standard will encourage building improvements that make homes warmer, energy bills cheaper and reduce carbon emissions from homes. We will publish further guidance to support social landlords with the implementation of the new standard in due course.

Future Home Standard (FHS)

The FHS will include high levels of fabric efficiency, low carbon heating and solar by default. We will publish the consultation response, full specification, alongside laying a Statutory Instrument in Q1 2026. This will set out the policy detail and transitional arrangements.

This goes beyond the significant steps we have already taken on the physical quality of social and affordable homes, and the steps taken ensuring tenants’ experiences and voices are at the heart of the social and affordable housing sector.

Awaab’s Law

Phase 1 of Awaab’s Law came into force on 27 October 2025, specifying that social landlords must address damp and mould hazards within fixed timescales, and all emergency hazards within 24 hours. We are now undertaking our test and learn approach before extending the requirements to other hazards.

Competence and Conduct, and Access to Information

In September 2025 the government directed the Regulator of Social Housing to set new standards on the competence and conduct of staff employed by social housing providers, and requirements on access to information given by Private Registered Providers, and to bring these standards into effect in October 2026. On 8 December 2025, the Regulator for Social Housing published a consultation on the changes it intended to make to the Transparency, Influence and Accountability Standard to reflect these new requirements. The consultation closes on 3 March. We have also committed to extending the Freedom of Information (FOI) Act to cover Tenant Management Organisations (TMOs) with local authority landlords, enabling tenants of these TMOs to request access to the information they need about their homes in the same way as other local authority tenants.

Social Housing Innovation Fund

Last year, the government launched a £2 million Social Housing Innovation Fund to support innovative projects which improve tenants’ engagement with their landlords and their influence over decisions affecting their homes. Social landlords, tenant groups and other relevant organisations are eligible to receive up to £120,000 per project. The window for funding applications closed on 9 Jan 2026 and grants will be awarded to successful bidders before the end of March.

Oversight of Delegated Management Organisations

Last year, we carried out a call for evidence on the operation and oversight of Delegated Management Organisations, including Tenant Management Organisations and Arms Length Management Organisations (ALMOs). Having considered the responses and evidence from further stakeholder engagement, we are now launching a full review of the statutory Right to Manage for social residents, which sets the regulatory framework for TMOs. The review will assess the policy and regulatory changes which are needed to ensure residents whose homes are managed by TMOs can be confident their housing management is fit for purpose and effective oversight and accountability is in place, and also consider how more residents could be supported to take control of aspects of their housing management, with appropriate support and oversight from their landlord.

Shared Ownership

Shared Ownership will continue to be funded through the SAHP. As announced in November 2025, targeted improvements are being made to the scheme to ensure it works as effectively as possible for customers, many of whom have faced challenges they could not have foreseen. These reforms should improve the experience of Shared Owners, including by giving greater consideration to long-term customer affordability, increasing transparency and fairness on costs, and giving customers the ability to opt out of fees for services that are optional. Further details on these requirements are now  published, and more will follow in the next two months. To help provide longer-term certainty, we will not change, during the lifetime of the SAHP, the provision in our model lease that permits annual rent increases of up to CPI+1% – aligning with our 10-year rent settlement for social housing rents.

Electrical safety

New electrical safety regulations came into force in November 2025, bringing social housing in line with the private rented sector. These new requirements were introduced for landlords to carry out checks on electrical installations and electrical appliances they have provided at least every 5 years for new lets. These requirements will come into force over the course of 2026 for existing tenancies.

The review of the Housing Health and Safety Rating System

We will bring forward new regulations to bring the conclusions of the Housing Health and Safety Rating System (HHSRS) review into force. The HHSRS is the cornerstone of housing standards and these regulations will make it more efficient and accessible to use for experts, and easier to understand for landlords and tenants. The HHSRS sets out how we assess whether people’s homes pose a danger to them. It underpins whether social housing meets criterion A of the DHS, and we use it to inform national data on housing and risks to health. Awaab’s Law was also developed using HHSRS hazards.

Allocations and use of existing social housing

In December, the government published its National Plan to End Homelessness. Alongside this, we also published a systems-wide evaluation of homelessness and rough sleeping, which looked at existing social housing allocations, and reported on a range of ways in which existing legislation, policy and practice around social housing allocations could be adapted to better relieve or prevent homelessness. The plan committed to working with partners to update statutory guidance on social housing allocations, to ensure that allocations reflect local need and effectively support vulnerable households. We want to work with a wide range of stakeholders to identify areas where we can update the guidance and have already started that process.

We expect social housing landlords to cooperate with councils in housing statutory homeless households. For homes funded by the SAHP, we expect providers to have nominations agreements (or their equivalent) in place with councils and for these to include 100% of first lets to go to the local council for nomination, unless otherwise agreed with the council. Where joint working is not operating effectively, we will consider levers to require social housing landlords to rehouse statutory homeless households referred by the council, including legislating if necessary.

In addition, we have launched a review into how effectively social and affordable housing providers use their properties, including exploring ways to reduce the time homes are left empty, encourage greater movement within the sector to address under-occupancy and overcrowding, and support people to move into more suitable properties.

Step 4: Reinvigorate council housebuilding

The total number of homes completed annually by councils has increased year on year for the past 5 years. In 2024-25, councils completed 10,480 homes – the highest number since the current reporting period began in 1991-92. We will continue to work with the sector to ensure that councils have the confidence and capability to build even more homes.

Social and Affordable Homes Programme

The design of the SAHP includes a series of features aimed explicitly at increasing engagement from councils (and other specialist providers) including the new Continuous Market Engagement ‘portfolio’ route.

Borrowing costs

The ‘preferential’ borrowing rate for council housebuilding from the Public Works Loan Board (PWLB) was due to end in March. To provide councils with greater certainty to increase their supply plans, we have announced that this preferential rate will be extended for another year until the end of March 2027. It will continue to be set at gilts+40bps and be available for housebuilding through the Housing Revenue Account (HRA). The government keeps all PWLB rates under review.

HRA reform

In July, we announced that we would review whether the current threshold for when a council is required to open an HRA was set at the right level. Following the conclusion of this review, we have increased the threshold from 200 to 1,000 homes. This will ensure that councils always have enough homes to make opening and operating an HRA financially viable. It will also provide councils without an HRA with greater flexibility to increase their supply plans, including through SAHP and the acquisition of resettlement homes through the Local Authority Housing Fund.

Skills and capabilities

In July 2025, we launched the Council Housebuilding Skills & Capacity Programme (CHSCP). Over its first year, CHSCP has engaged with 81 councils through the Council Housebuilding Support Service to improve their capability to deliver new housing. As part of the expanded Pathways to Planning programme, CHSCP will recruit and train up to 50 graduates for placement with councils in 2026-27 to become qualified surveyors or construction project managers. Finally, in November, CHSCP’s Council Housebuilding Support Fund allocated £5.5 million to 29 councils to develop SAHP bids.  As the Support Fund’s first round was heavily oversubscribed, we have announced the allocation of a further £3.5 million to 15 more councils. In total, this will enable the delivery of up to 9,850 new homes and accelerate the delivery of a further 1,700 homes across the course of SAHP.

Over the coming months, we will also work with councils to increase and firm up the ambition of their future plans for development, across the full range of levers available to them, including direct council delivery of housing. We want to ensure that every council has a plan to increase their delivery over the long-term, and that the ambition of that plan matches individual councils’ financial situation, the social and affordable housing need in their area, and our national supply aims.

Step 5: Forge a renewed partnership with the social and affordable housing sector to build at scale

A decade of social and affordable housing renewal will only be delivered by government working in close partnership with the sector. That is why, in the coming weeks, we will work with the National Housing Federation, Local Government Association and other sector bodies to agree a compact. Once agreed, that compact will be overseen by a taskforce comprised of representatives from a range of sector organisations and interests. More detail about the terms of reference and membership of this group will be set out in the coming weeks.

At the heart of the compact will be ambitious social and affordable housebuilding commitments, evidencing how the grant funding support and regulatory certainty and stability that this government has provided has translated into ambitious delivery plans and bids into the SAHP from housing associations, councils and other Registered Providers. It will also be premised on strengthened joint governance and accountability mechanisms, including agreed supply, decency and other metrics which will be tracked and monitored, with oversight provided by regular reporting back to the Secretary of State.

1. More specifically, this encompasses Registered Providers that are classified to the private sector. ↩