What will social housing face in the year ahead?

Institutional investment into the affordable housing sector will continue to grow throughout 2026, with the registration of several new high-profile for-profit registered providers (RPs) and significant additional capital being deployed from a range of investors. The buying and selling of for-profit RPs continues to be a growing market to watch as the year progresses.

2026 will also see the government implement the results of several consultations that took place in 2025, including on rent convergence and the Decent Homes Standard. These will have a significant impact on providers’ activities, budgets and business plans for the years ahead.

National Housing Bank welcomed

Social housing providers can expect a major boost in financing following the launch of the National Housing Bank under Homes England, a dedicated financing platform designed to accelerate housing delivery across the country. The National Housing Bank is expected to channel £16bn of public investment to leverage over £53bn of private capital to back the construction of approximately 500,000 homes across England.

“The National Housing Bank represents a step-change in the funding landscape for RPs, unlocking capacity, reducing the cost of capital and accelerating delivery at scale”

For the sector, the National Housing Bank will make available £2.5bn in low-interest loans to support social and affordable housing, alongside a broad suite of debt, equity and guarantee products tailored to enable complex and large-scale developments. This represents a step-change in the funding landscape for RPs, unlocking capacity, reducing the cost of capital and accelerating delivery at scale.

Rent convergence

We expect to hear the results of the government’s rent convergence consultation in January 2026. There is an optimism that the option to use convergence, taking into consideration local conditions, will slowly bring rents up to a ‘formula rent’ before the latest 10-year CPI+1% settlement.

Rent convergence ended in 2014, with the government at the time imposing the CPI+1% regime for social housing rent increases. Social housing providers have, against a backdrop of high inflation and the cost-of-living crisis, struggled to balance the books between remediation, new development and long-term maintenance and repairs.

The reintroduction of rent convergence is welcome news for social housing and for-profit providers; rents will increase along with marginally higher valuations and, consequently, increased borrowing. Coupled with (hopefully) further interest rate reductions, it may even contribute towards a renewed interest in capital market products.

Conveyancing reforms

Social housing providers dealing with new build sales will have to address proposed changes to the conveyancing process, with the Home Buying and Selling Reform consultation published in October 2025.

One of its key proposals is the idea of introducing a mandatory requirement that sellers would have to work with their conveyancers and surveyors to carry out searches and a property condition assessment before putting a property on the market.

It also proposes that a standardised set of data would have to be provided at the point of listing. Effectively, most of the legal work will be front-loaded, with the government considering legislation to give this some teeth.

Planning reforms

The government has trailed several reforms to help deliver its target of 1.5 million new homes. While the emerging London Plan works its way through various draft stages, the mayor and government have also published proposed emergency measures. The consultation on these measures opened towards the end of last year, as did an early Christmas gift of a draft National Planning Policy Framework (NPPF), and is open until late January.

“The draft NPPF consultation includes the potential for minimum levels of social rent housing being prescribed in national policy, and proposed emergency housing delivery measures for London"

While these propose a reduction in the headline levels of affordable housing delivery, they also include proposed measures to potentially and significantly reduce Community Infrastructure Levy liabilities for mixed tenure schemes in the capital.

They sit alongside the government putting more focus on delivery of social rent as a preferred tenure. The draft NPPF consultation includes the potential for minimum levels of social rent housing being prescribed in national policy, and proposed emergency housing delivery measures for London.

What happens to the market for Section 106 units remains to be seen, as broad funding challenges remain and will take some time to be unlocked. Rent convergence will help bring some greater financial confidence, but policy and wider market trends all point towards the need to broaden partnership models of working at the early stages, including through planning, to ensure that Section 106 homes are deliverable and desirable for RPs.

That has been recognised by the government in various consultation papers, and hopefully will be acknowledged as best practice by local planning authorities when applications devised on that basis are presented to them.

Charlie Proddow, partner and head of social housing, Winckworth Sherwood