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After a year of political uncertainty, the affordable housing sector needs stability
Inertia has meant housing providers have been unable to plan ahead, putting a blocker on housing ambitions, writes Omar Al-Hasso, chief executive of SimplyPhi
Omar Al-Hasso is CEO of SimplyPhi
Inertia has meant housing providers have been unable to plan ahead, putting a blocker on housing ambitions, writes Omar Al-Hasso, chief executive of SimplyPhi #UKhousingLast year was characterised by uncertainty for the affordable housing sector, largely fuelled by political hesitation. Local authorities and housing associations lost significant momentum in their housing delivery plans as they waited for scheduled funding programmes to kick off. This glacial period must come to an end in 2026, so that local authorities can roll up their sleeves and implement action.
In March last year, the government made a major announcement, that it would allocate £39bn to the Social and Affordable Homes Programme (SAHP). However, little guidance was revealed until late November, when prospectuses were published ahead of the Autumn Statement. Going into 2026, the specifics still remain unclear until bidding opens in February.
At the same time, the fourth round of the Local Authority Housing Fund (LAHF) will kick off in the coming months, but details were released only at the beginning of December.
This inertia has put local authorities in a position where they have been unable to plan ahead, stalling the development and creation of new affordable homes and ultimately putting a blocker on housing ambitions.
Affordable housing delivery has always been intrinsically tied to the political calendar. While it’s reasonable to expect that there will be a lot of confirmed details in the coming year, my concern is that decision-making at local government level will be gridlocked by the May elections.
With so much hanging in the balance from a funding perspective, there’s a risk that local authorities will use the elections as a reason to wait instead of actioning plans. This could result in the start dates for housing delivery programmes being delayed into the summer and beyond, which would be a major waste of time.
“While it’s reasonable to expect that there will be a lot of confirmed details in the coming year, my concern is that decision-making at local government level will be gridlocked by the May elections”
I appreciate the need for a long-sighted point of view – the government’s grant proposals equate to a 10-year programme of funding, after all – but the truth is that there are real people in need of homes today. The demand for affordable social and temporary homes has continued to escalate rapidly throughout 2025.
SimplyPhi’s market analysis found that the growing gap between market rents and LHA rates (the ‘affordability gap’) is putting more and more families and low-income earners at risk of homelessness. In the fourth quarter of the year, only 1.6% of private rental homes on the market were available at LHA rates, equivalent to just 1,191 out of 71,630 properties, representing a 3% decline in affordable supply compared to the start of the year.
Furthermore, the government has continued to push for the creation of new build social rent homes. While these play an important role in meeting housing targets, there is concern that the grant levels currently being discussed aren’t guaranteed to be sufficiently workable in the marketplace.
More worrying still, even if the proposed homes are to be built, this will not address the immediate need for homes in the coming 12-18 months. Utilising and optimising existing housing stock must be a bigger part of the solution to help meet this demand.
“Next year will also mark the halfway period in this parliament, at which point the government will begin to look ahead to the next election. There will be a question over which of its promises Labour will prioritise”
As we go into 2026, it is my hope that the Ministry of Housing, Communities and Local Government will do more to enable local government decision-making, which can be actioned through the separate arms of the National Housing Bank, Homes England and the Greater London Authority. Local government is a vital key to making this happen, so it needs to feel confident enough to engage with the right partners and be proactive in making decisions to progress housing delivery.
Next year will also mark the halfway period in this parliament, at which point the government will begin to look ahead to the next election. There will be a question over which of its promises Labour will prioritise. Housing will be a necessary part of this picture, and there are some housing U-turns that the government will struggle to make – it is pretty evident that Labour will fail on its ambition of 1.5 million homes, for example.
2026 must be the year of action over hesitation, giving local authorities the certainty they need to begin to progress on affordable housing delivery.
Omar Al-Hasso, chief executive, SimplyPhi
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