Fund councils and housing associations to build 100,000 more social homes a year

## Summary From April 2027 the government would give councils and housing associations an extra £15bn a year to build 100,000 more social rented homes a year in England. Cheaper land, faster planning on large sites and more construction should raise housebuilding and investment, and more affordable homes should help people move to where the jobs are. ## Objective England builds too few homes, and social rented housing has fallen to around 10,000 completions a year. High land prices, slow land assembly and uncertain planning hold back delivery, and the result is low residential investment and poor labour mobility. The policy works mainly through **investment**, by raising public and housing association spending on homes. It has secondary effects on **labour supply and productivity**, because cheaper housing makes it easier for workers to move, and on **prices**, through rents and construction costs. ## Measures 1. **Social Rent Capital Grant.** £15bn a year in cash of capital grant, on top of baseline, for 100,000 extra social rented homes a year in England. That is an average of £150,000 grant per home. - Assumed total scheme cost is £280,000 per home. Providers fund the remaining £130,000 by borrowing against future rents. - Eligible bodies are councils with a Housing Revenue Account and registered providers regulated by the Regulator of Social Housing. - Homes must be let at social rent under the Rent Standard and are excluded from Right to Buy for 15 years. - Assumed delivery split is 40% councils and 60% housing associations. - Homes England administers the grant outside London and the Greater London Authority administers it in London. Allocation follows housing need. 2. **Compulsory purchase at existing-use value.** Land acquired compulsorily for schemes that are at least 50% social rent is compensated at existing-use value plus a statutory premium of 10%. Hope value is excluded automatically, with no case-by-case direction needed. - Acquiring authorities are councils, Homes England, the GLA and the new development corporations. - The measure covers England only. 3. **Housing Development Corporations.** Twelve new corporations are created for large sites of 5,000 homes or more. - They have powers to assemble land, compulsory purchase powers and plan-making and development-management powers that replace the local planning authority's on their designated sites. - They are sponsored by the Ministry of Housing, Communities and Local Government (MHCLG). Their running costs of about £0.1bn a year are assumed to come within the £15bn. ## Timing and phasing - **2027-28:** Grant opens in April 2027. Early spending is weighted towards land purchase and speeding up schemes already in the pipeline. Assumed additional starts are 60,000 and completions 15,000. - **2028-29:** The compulsory purchase reform takes effect in April 2028. The first six development corporations are designated. Starts are 100,000 and completions 55,000. - **2029-30:** All twelve development corporations are operating. Starts are 100,000 and completions 90,000. - **2030-31:** Steady state. Starts are 100,000 and completions 100,000. Grant is paid in instalments at land purchase, start on site and completion. Cash spending is held at £15bn a year by allowing some grant to be paid early. ## Cost and financing All figures are £bn in cash terms and are not uprated for inflation. | | 2027-28 | 2028-29 | 2029-30 | 2030-31 | |---|---|---|---|---| | Capital grant (public sector investment) | 15.0 | 15.0 | 15.0 | 15.0 | | Memo: extra council borrowing against rents (public sector) | 3.1 | 5.2 | 5.2 | 5.2 | - **Financing:** the grant is funded entirely by additional government borrowing, with no offsetting tax rise or spending cut. - **Council borrowing:** councils' own borrowing to fund their share of homes is assumed to be 40% of 100,000 homes × £130,000, phased in line with starts. It counts towards public sector borrowing. - **Housing association borrowing:** this is private sector borrowing and does not count towards public sector borrowing. ## Delivery **Legislation** - The compulsory purchase changes amend the Land Compensation Act 1961, building on the hope-value directions in the Levelling-up and Regeneration Act 2023. They need primary legislation in a Housing and Land Bill in the 2027 session. - The development corporations are designated under the New Towns Act 1981, as amended. - The grant needs no new powers, because it uses Homes England's existing powers. **Responsibility** - MHCLG leads the policy. - Homes England and the GLA deliver the grant. - The Regulator of Social Housing oversees the providers. **Main delivery risks** - **Construction capacity:** the industry has limited spare capacity, and a shortage of skilled trades could push up building costs and squeeze out private housebuilding. - **Legal challenge:** compensation at existing-use value may be challenged under Article 1 of Protocol 1 of the European Convention on Human Rights. - **Pace of setting up development corporations:** they may take longer to establish than planned. - **Provider finances:** housing associations' balance sheets may limit how much they can borrow. - **Under-spending:** under-spending is likely in 2027-28. ## Relation to the baseline The March 2025 forecast includes: - the Affordable Homes Programme 2021-26 within departmental capital spending; - capital totals beyond 2025-26 set at the overall envelope, with no specific new social housing programme; - the December 2024 changes to the National Planning Policy Framework, with net additions to the housing stock rising to about 305,000 in 2029-30; - the existing hope-value direction powers under the 2023 Act. The Social and Affordable Homes Programme announced at the June 2025 Spending Review is not in the March 2025 baseline. The analyst should treat the £15bn as additional to the March 2025 baseline, as the idea specifies, and note that the two programmes overlap. Only the extra grant, the automatic exclusion of hope value and the new development corporations should be analysed.

An extra £15bn a year of cash capital grant from April 2027 for 100,000 more social rented homes a year in England, plus council borrowing of ≈£5.2bn a year, raises public sector net investment by ≈£18bn in 2027-28 and ≈£20bn a year from 2028-29. As the proposal specifies, all of it is treated as additional to the March 2025 baseline, although it overlaps with the June 2025 Social and Affordable Homes Programme, which is not in that baseline. It maps to capital grants to housing associations (KCGPSO), grants to councils (KCGLA) spent as local authority investment (LAIPS) and public sector net investment (PSNI). The net construction impulse is added to private dwellings investment (IH) and total investment (IF); shock deltas are £m per quarter, with IH and IF shown at their 2030 steady state after displacement. The compulsory purchase reform and the development corporations have no direct lever: they are treated as transfers of hope value from landowners that make the assumed £280,000 cost per home achievable, plus a small supply-side and tax effect.

### Interpretation The proposal gives councils and housing associations an extra £15bn a year of cash capital grant from April 2027 (2027Q2) to build 100,000 more social rented homes a year in England. The March 2025 baseline contains no specific social housing programme once the Affordable Homes Programme 2021-26 ends, so the grant is treated as wholly new money, as the proposal specifies. Councils deliver 40% of the homes and also borrow ≈£5.2bn a year against future rents (≈£3.1bn in 2027-28); that borrowing counts as public spending. Housing associations borrow a further ≈£7.8bn a year privately. From April 2028, compulsory purchase compensation on majority-social-rent schemes is capped at existing-use value plus 10%. Twelve housing development corporations take over land assembly and planning on sites of 5,000 homes or more. Public borrowing therefore rises by ≈£18.1bn in 2027-28 and ≈£20.2bn a year from 2028-29, roughly 0.6% of GDP. The 60% of grant paid to housing associations maps to capital grants by central government to the private sector (KCGPSO, +£9bn a year), because registered providers are classified as private non-financial corporations. The homes they build appear in private sector investment in dwellings (IH). The 40% paid to councils maps to capital grants from central government to local authorities (KCGLA, +£6bn a year), which nets out inside general government. What matters is what councils spend from grant plus borrowing, which appears in local authority gross fixed capital formation (LAIPS, +£9.1bn in 2027-28 and +£11.2bn a year thereafter). Public sector net investment (PSNI) rises by the sum of the two. It feeds public sector net borrowing (PSNBNSA) through the identity PSNBNSA = −PSCB + PSNI, where PSCB is the public sector current budget. The published model treats total gross fixed capital formation (IF) as exogenous and business investment (IBUS) as a residual. IF is therefore raised by the net dwellings impulse, so that housebuilding does not mechanically crowd out IBUS. The compulsory purchase reform and the development corporations have no direct lever. They transfer hope value from landowners to the schemes and speed up large sites, so they are treated as what makes the assumed £280,000 cost per home achievable, plus a small supply-side and tax effect. The programme overlaps with the Social and Affordable Homes Programme announced in June 2025 (≈£39bn over ten years, roughly £4bn a year). If the live baseline already contained that programme and the two were merged, the incremental impulse would be about a fifth smaller. ### How it works through the OBR model 1. **The grant enters the public accounts through three exogenous spending levers.** From 2027Q2, KCGPSO rises by £2.25bn a quarter and KCGLA by £1.5bn a quarter. LAIPS rises by ≈£2.3bn a quarter, stepping up to £2.8bn from 2028Q2 as council borrowing reaches its full £5.2bn a year. PSNI therefore rises by £18.1bn in 2027-28 and £20.2bn a year after that, and every pound adds one-for-one to borrowing before any feedback. The model has a calibrated rule that books 55% of KCGPSO as a capital transfer to households (KGHH); here it is overridden. The grant goes to housing associations, which are companies, so it improves company rather than household finances and does not enter household disposable income or consumption directly. 2. **Only part of the cash becomes construction activity, and it builds with the flow of starts.** Buying land is a transfer of an existing asset rather than new output, so it adds nothing to GDP. The proposal weights early grant towards land and towards schemes already in the pipeline. Land is taken at ≈20% of the £280,000 scheme cost. Construction spending is approximated as the average of starts and completions times ≈£224,000 per home, including the share housing associations fund by borrowing. That gives ≈£10bn a year by late 2027, ≈£18.5bn by late 2028 and ≈£22bn a year in 2030. Builders are paid as homes go up over an 18-24 month build, so the demand effect lags the cash, which is front-loaded. 3. **Construction has little spare capacity, so a growing share of the programme displaces private housebuilding.** The baseline already has net additions to the housing stock (NETAD) rising to ≈305,000 a year, and the programme would raise new-housing output by around 40%. The costing assumes the programme's construction displaces private and section 106 building by 25% in 2027, rising to 40% by 2030. A further ≈15% of what remains is assumed to go on higher build costs rather than extra volume. The net real dwellings impulse, split between IH and LAIPS and feeding IF, is therefore ≈0.23% of GDP in late 2027, ≈0.37% in 2028-29 and ≈0.33% by 2030. When builders and bricklayers are already fully booked, a large new customer partly bids work away from existing ones and partly just pushes up prices. 4. **Imports leak a slice of the extra demand.** The model weights investment by an import content of 23.4% in import-weighted investment (MIF), where MIF = 0.234 × IF. Housebuilding uses mostly domestic labour and bulky local materials, so a lower ≈16% is used here. That means ≈£2bn a year of the net impulse buys imported timber, fittings and equipment rather than UK output. This is why the direct boost to output (GDPM) is a little smaller than the investment impulse itself. 5. **Higher construction output raises employment and lowers unemployment.** Market-sector gross value added (MSGVA) rises with the build. The market-sector employment equation (EMS) responds with a short-run elasticity of ≈0.17 to the previous quarter's output growth, plus strong persistence. Employment builds to ≈0.2% (roughly 70,000 jobs) above baseline by 2029. Part of the extra labour comes from higher participation and migration, so the unemployment rate (LFSUR) falls by a smaller ≈0.12 percentage points. That is about one-third of the output gain, in line with the usual rule of thumb linking the output gap to unemployment (the Okun relationship). Construction is labour-intensive, which keeps the jobs content of this demand relatively high. 6. **Household incomes rise and consumption follows, but slowly.** More jobs and slightly higher pay lift real household disposable income (RHHDI) by ≈0.2% by 2030. In the consumption equation (CONS), the short-run income elasticity is only ≈0.10 and the long-run elasticity ≈0.44, with ≈12.5% of any gap closed each quarter. Each one-point fall in unemployment adds a temporary boost of ≈0.84%, while slightly higher prices trim the real value of household wealth. Together these leave consumption ≈0.11% above baseline in 2029-30. In the model households spend extra income only gradually, so they add a second-round boost worth ≈0.05% of GDP rather than a large multiplier. 7. **Business investment gets an early lift from demand, then a squeeze from interest rates and competition for contractors.** Desired capital stock (KSTAR) moves one-for-one with market-sector output and has an elasticity of −0.4 to the user cost of capital (COC). Higher output raises KSTAR by ≈0.35%, lifting IBUS by ≈0.15% by 2028. As Bank Rate rises, the effective rate on bank lending to companies (RIC) follows with a long-run pass-through of ≈0.82. That pushes COC up by ≈0.4% and KSTAR down by ≈0.15%, while commercial building competes with the programme for the same contractors. By 2030 these offsets slightly outweigh the demand effect, and IBUS is ≈0.05% below baseline. 8. **A tighter labour market nudges up wages and prices — the Phillips channel.** In the private-sector earnings equation (PSAVEI), a fall in unemployment raises wage growth directly, with a coefficient of −0.0096 on the change in LFSUR. It also raises the equilibrium wage, through a coefficient of 0.0137 on LFSUR in the error-correction term, so pay ends up ≈0.15% higher. That feeds market-sector unit labour costs (ULCMS), which carry a ≈70% weight in services costs (SCOST). Through retail costs (RPCOST), the consumer expenditure deflator (PCE) rises by ≈0.08% by 2030. Construction prices, part of the investment deflator (PIF), rise much more, by an estimated 2-3%, which is why the fixed-cash programme buys fewer homes than it would at baseline prices. Extra supply should shave market rents slightly by 2030, but by too little to shift headline inflation. 9. **Monetary policy and the gilt market lean against the stimulus, while the new homes add a little supply.** Bank Rate (R) is exogenous in the model. The costing assumes the Monetary Policy Committee raises it by ≈0.05pp in 2027, ≈0.10pp in 2028 and ≈0.15pp from 2029, in response to a ≈0.35% boost to demand and slightly firmer inflation. The 20-year gilt yield (RL), also exogenous, is assumed to rise by ≈0.11pp by 2030. About 5bp of that comes from the higher expected path of Bank Rate, and about 6bp is term premium on ≈£69bn of extra debt (≈2% of GDP at ≈3bp per point). On the supply side, ≈150,000 net additional homes by end-2030 lift the total housing stock (HSALL) by ≈0.6%. They add rental housing services to output and make it easier to move to high-productivity areas. Together these are worth ≈0.04% of GDP by 2030, with most of the benefit beyond the horizon. ### Key assumptions - **Spending profile:** £15bn a year of grant in cash from 2027-28 to 2030-31, not uprated, plus council borrowing of £3.1bn in 2027-28 and £5.2bn a year thereafter. PSNI rises by £18.1bn and then £20.2bn a year, taken at face value with no underspend adjustment, even though the proposal flags underspending risk in 2027-28. - **Classification and delivery split:** 60% of homes are built by housing associations, classified as private non-financial corporations (KCGPSO, IH), and 40% by councils (KCGLA, which nets out, then LAIPS). Housing association borrowing of ≈£7.8bn a year at steady state is private and outside public debt. - **Land share of scheme costs:** ≈20% of the £280,000 per home, a transfer of non-produced assets with no GDP effect. The remaining ≈£224,000 is construction, spread over an 18-24 month build. - **Displacement of private housebuilding:** 25% in 2027, 30% in 2028, 35% in 2029 and 40% in 2030. This is analyst judgement for a near-capacity sector whose baseline already delivers ≈305,000 net additions a year. - **Construction cost absorption:** ≈5% of the net nominal impulse in 2027, rising to ≈15% from 2029, goes on higher build prices rather than volume. That leaves real dwellings investment ≈£11bn a year (≈0.33% of GDP) above baseline in 2030. - **Import content of housebuilding:** ≈16%, below the model's 23.4% for all investment. - **Monetary-policy reaction:** Bank Rate (R) +0.05pp in 2027, +0.10pp in 2028 and +0.15pp in 2029-30. The 20-year gilt yield (RL) rises by 0.03pp, increasing to 0.11pp by 2030. RIC passes through ≈0.82 of the change in Bank Rate in the long run. - **Labour-market response:** employment ≈0.2% higher by 2029 through the EMS equation, with unemployment falling by about one-third of the output gain. - **Tax content of extra activity:** ≈33% of extra nominal GDP, with a lag in the first year. This is below the ≈37% average because new-build housing is zero-rated for VAT and construction relies heavily on self-employment. - **Housing support savings:** ≈£2,000 a year per occupied new home in lower housing benefit, Universal Credit housing costs and temporary accommodation, net of chain effects. Council homes yield ≈£4,000 a year each in net rent. - **Compulsory purchase at existing-use value:** an incremental transfer of hope value from landowners of ≈£0.6bn a year by 2030, beyond what existing direction powers already capture. It is absorbed within the £280,000 cost per home rather than delivering extra homes. - **Supply-side effects:** ≈150,000 net extra homes by end-2030 after displacement. Housing services and labour mobility add ≈0.02% of GDP in 2029 and ≈0.04% in 2030. - **Baseline and debt-interest rates:** the March 2025 EFO rolled forward, without the Social and Affordable Homes Programme. Nominal GDP is ≈£3.07tn in 2027 rising to ≈£3.4tn in 2030, and public sector net debt (PSND) is ≈£3.3tn (≈96% of GDP) at end-2030. New debt costs ≈4.2% on average. The in-model coefficients — the employment, consumption, earnings and price equations — are comparatively firm, and they mainly govern how a given construction impulse spreads through the economy. Most of the uncertainty sits in judgements taken from outside the model. The result hinges most on displacement and cost absorption. If construction capacity is tighter than assumed, half or more of the programme could displace private building or turn into higher prices. The net impulse and the output gain would then be roughly a quarter smaller (≈0.27% rather than ≈0.36% in 2030), and borrowing ≈£3-4bn higher over the horizon as the demand feedback shrinks. With more slack, for example after a private housing downturn, the gain could approach ≈0.5% of GDP. Delivery pace matters next: an underspend of the kind the proposal expects in 2027-28 would cut the gross cost and the first-year demand effect roughly one-for-one with the cash not spent. The monetary-policy reaction and the gilt-market response are also judgements. If the Bank of England looked through the stimulus, output would be ≈0.05% higher and debt interest ≈£2bn lower over the horizon. A further 10bp on RL, of the kind seen when markets have worried about UK borrowing, would add ≈£1.3bn of debt interest and ≈£140 a year to an average mortgage. The housing-benefit savings, hope-value transfer and supply-side effects rest on external evidence but are small within the horizon, so they barely move the fiscal result. Finally, the counterfactual matters: if the live baseline already contains the Social and Affordable Homes Programme and the two are merged, the incremental impulse and every number here would be about a fifth smaller. ### Headline results Output (GDPM) is ≈0.20% above baseline by the end of 2027, ≈0.36% by the end of 2028 and ≈0.38% at the end of 2029, easing back to ≈0.36% in 2030. The profile follows the physical build. Construction spending ramps up with starts through 2027 and 2028 and reaches its steady state in 2029-30, while the grant is frozen in cash. After that the gain edges down for two reasons: a rising share of the programme displaces private building or is absorbed by higher build costs, and higher Bank Rate starts to bite. The money is spent directly on construction rather than handed to households, so the multiplier on the net construction impulse is close to one. But only around three-fifths of the ≈£20bn of gross public spending shows up as extra output once land purchases, displacement, cost inflation and imports are stripped out. Consumption (CONS) responds slowly, rising from ≈0.04% above baseline in 2027 to ≈0.11% in 2029-30 as jobs and pay rise. Business investment (IBUS) gets an early lift of ≈0.12-0.15% from stronger demand. Higher borrowing costs and competition for contractors then leave it ≈0.05% below baseline in 2030. The unemployment rate (LFSUR) is ≈0.1 percentage points lower from 2028, roughly 40,000 fewer people out of work. The consumer expenditure deflator (PCE) drifts up to ≈0.08% above baseline by 2030 as wage pressure feeds through, and construction prices rise considerably more. The 20-year gilt yield (RL) rises steadily to ≈0.11pp above baseline as debt accumulates and Bank Rate is held higher. The supply-side gains the proposal is aiming at — more homes, cheaper rents and easier moves to where the jobs are — are real but mostly lie beyond 2030. By the end of the horizon the housing stock is ≈0.6% larger than in the baseline, adding only ≈0.04% to GDP through housing services and mobility. Within the forecast horizon this is overwhelmingly a demand shock to a construction sector with little slack, which is why the output gain plateaus rather than continuing to build.

### Costing the policy - **Gross static cost (mechanical spending increase):** +£73.7bn on public sector net borrowing (PSNB) over 2027Q2-2030Q4. Public sector net investment (PSNI) rises by £18.1bn in 2027-28 (£15bn of grant plus £3.1bn of council borrowing) and £20.2bn a year thereafter. In calendar years that is £13.6bn in 2027, £19.7bn in 2028 and £20.2bn in each of 2029 and 2030. The £6bn a year paid to councils is an internal transfer within government, so what scores is the councils' spending, including the share they borrow. Housing association borrowing is private and does not score. - **Lost land and property taxes (lower land prices, displaced private sales):** +£1.0bn. Paying existing-use value rather than hope value shrinks landowners' taxable gains, costing ≈£0.5bn of capital gains and corporation tax. Displaced private new-build sales bring in ≈£0.5bn less stamp duty land tax. Neither is captured by taxing extra GDP, because land and property sales are not output. - **Demand feedback (income tax, NICs, VAT and corporation tax on extra activity, lower benefit spending):** −£13.6bn. Nominal GDP is ≈0.1% higher in 2027 and ≈0.4-0.45% higher in 2029-30, ≈£41bn cumulatively. An effective tax take of ≈33% recovers ≈£13.3bn; this is below the ≈37% average because new homes are zero-rated for VAT and many construction workers are self-employed and pay with a lag. Lower unemployment saves ≈£0.8bn of Universal Credit, while slightly higher prices add ≈£0.5bn to benefit uprating. - **Supply-side receipts feedback (more homes and better labour mobility):** −£0.5bn. Housing services and easier job moves add ≈0.02-0.04% of GDP in 2029-30. That output is lightly taxed, because social landlords' rental surpluses largely fall outside corporation tax, so the receipts gain is small. - **Housing benefit and temporary accommodation savings, net council rents:** −£1.1bn. By end-2030 there are about 320,000 home-years of occupation. At ≈£2,000 a home a year of lower housing support, as households leave private renting and temporary accommodation, that saves ≈£0.6bn. The ≈40% of homes owned by councils bring in ≈£4,000 a year each of net rent, ≈£0.5bn. - **Debt-interest feedback (higher debt, Bank Rate, gilt yields and RPI):** +£9.8bn. Interest at ≈4.2% on the extra debt costs ≈£5.3bn. Bank Rate (R) up to ≈0.15pp higher adds ≈£2.2bn on ≈£500bn of short-rate-sensitive debt, mainly reserves created by the Bank of England's gilt purchases. The ≈0.1pp rise in the 20-year gilt yield (RL) on new issuance adds ≈£1.4bn. A slightly higher consumer expenditure deflator (PCE) and RPI raise the uplift on index-linked gilts by ≈£0.9bn. By 2030 the feedback is ≈£4.4bn a year and rising. - **Net cumulative PSNB change:** +£69.3bn. Summing the rows, borrowing is higher by ≈£13.2bn in 2027, £18.1bn in 2028, £18.6bn in 2029 and £19.4bn in 2030. About 94% of the gross cost remains after feedback, an ongoing hole of ≈0.57% of GDP by 2030. ### Debt path Public sector net debt (PSND) rises roughly one-for-one with the extra borrowing. It is ≈£13.2bn higher by the end of 2027, £31.3bn by end-2028, £49.9bn by end-2029 and ≈£69.3bn by end-2030, against a baseline of ≈£3.3tn (≈96% of GDP). Differences in timing between cash and accruals are ignored. The ≈£26bn housing associations borrow over the period sits on their own balance sheets, outside PSND. The ratio uses baseline nominal GDP of ≈£3.4tn in 2030. The extra debt alone adds 69.3 ÷ 3,400 ≈ 2.04 percentage points. But nominal GDP is ≈0.44% higher (≈0.36% real plus ≈0.08% prices), and that larger denominator takes ≈96% × 0.44% ≈ 0.42 points off. The debt ratio is therefore ≈1.62 percentage points higher in 2030, after ≈0.23pp in 2027, ≈0.60pp in 2028 and ≈1.08pp in 2029. The higher denominator offsets only about a fifth of the higher numerator, because the output gain plateaus while debt keeps accumulating. On the OBR's standard assumptions the programme is far from self-financing. Tax, benefit and rent feedback recovers ≈£15bn of the ≈£74bn gross cost, but lost land taxes give back ≈£1bn and higher debt interest ≈£10bn, so only ≈6% of the gross cost is recouped. That leaves a structural cost of ≈£19bn a year (≈0.57% of GDP) by 2030, which keeps rising with debt interest. Because almost all of it is capital spending, the current budget is roughly unchanged: extra receipts and benefit savings broadly match extra debt interest. However, net financial liabilities and net debt rise by ≈£69bn. The ≈£19bn added in 2029-30 alone would be enough to exhaust the ≈£15bn margin against the investment rule in March 2025. About £40bn of the spending creates council-owned homes, so public sector net worth falls by much less than debt rises.

### Overall pattern The direct cash effect on households is small next to the fiscal cost within the horizon. By 2030 roughly 200,000 households, on average across the year, live in the new social homes and gain ≈£2,500 a year each, ≈£0.5bn in total. Households owning farmland or development land lose ≈£0.3bn a year of hope value on land bought compulsorily. That gives a net direct gain of ≈£0.2bn, or ≈£7 a household on average. Most of the £15bn goes first to housing associations (≈£9bn a year, as businesses) and councils. Through them it reaches construction firms, materials suppliers and their workers. The value to tenants arrives slowly, as sub-market rents over the 60-plus-year life of each home. The direct effect is progressive both in cash and as a share of income: gains go to the bottom three tenths (≈0.1-0.4% of income) and losses to the top (≈0.05%). Once future taxpayers pick up the ≈£19.4bn a year of extra borrowing, the average household is a net loser of ≈£670 a year, although the families who move into the new homes still gain substantially. ### Who gains - **Households moving into the new social rented homes:** ≈+£2,500 a year, ≈11.4% of their income. They pay social rents of ≈£125 a week instead of private or temporary-accommodation rents, and those who were paying their own private rent save ≈£5,000 a year. Where rent was already met by housing benefit, most of the saving goes to the Exchequer. Concealed households moving out of family homes take on a rent for the first time. The cash average is therefore ≈£2,500, before large non-cash gains in security, space and quality. ### Who loses - **Households owning farmland or other development land:** ≈−£2,500 a year averaged across ≈120,000 landowning households, ≈3.6% of their income. The loss is concentrated on the ≈1% each year whose land is bought compulsorily at existing-use value plus 10%; each forgoes ≈£200,000 of development hope value. The existing hope-value directions in the 2023 Act mean only part of this is new. About half of the wider loss falls on companies, land promoters and pension funds rather than households. ### Paying for it and bond markets - **Future taxpayers:** ≈−£670 a household a year, ≈1.6% of income. Public sector net borrowing (PSNB) is ≈£19.4bn a year higher in 2030. Dividing ≈£19.4bn by ≈29 million households gives ≈£670 a household a year. This is an ongoing annual amount for as long as the programme runs, not a one-off or a total over the horizon. - **Future taxpayers (additional debt):** public sector net debt (PSND) is ≈£69bn higher by the end of 2030. Dividing ≈£69.3bn by ≈29 million households gives ≈£2,390 a household, a one-off total that future taxpayers must service or repay. Under the fiscal rules this borrowing has to be paid for eventually. If it were met by a broad mix of taxes, higher-income households would pay most in cash — roughly £2,000 a year for the top tenth against a few hundred pounds for the bottom tenth. A deficit-financed programme therefore has losers even though none are visible today. - **Mortgage borrowers:** ≈−£155 a year, ≈0.26% of income. The 20-year gilt yield (RL) is ≈0.11 percentage points higher by 2030 and Bank Rate (R) ≈0.15 points higher, and both feed into new and refixed mortgage rates. On an average ≈£140,000 mortgage, ≈0.11pp × ≈£1,400 per point ≈ £155 a year for the ≈30% of households with a mortgage. - **Savers and gilt holders:** ≈+£35 a year, ≈0.08% of income. Slightly higher deposit and annuity rates add a little interest income for households with savings. Pension funds holding existing gilts see a small fall in their market value. ### Across the income distribution Gains are concentrated at the bottom of the income distribution. Deciles 1 and 2 gain ≈£50 a year on average (≈0.36% and ≈0.25% of income), decile 3 ≈£35 and decile 4 ≈£20, because social housing is allocated by need and new social tenants are overwhelmingly on low incomes. The middle of the distribution is essentially unaffected. Losses rise through the top three deciles to ≈£65 a year (≈0.05% of income) in the top tenth, where ownership of land with development potential is concentrated. The averages hide very large differences within deciles. Almost all households in the bottom deciles gain nothing directly, while the roughly 1 in 50 who move into a new home gain ≈£2,500 a year. Gains per household are largest where the gap between social and market rents is widest: London, the South East and other high-rent cities, where housing associations and the development corporations will be most active. Farm households with volatile, low measured incomes can appear in the bottom decile despite substantial land wealth. ### Caveats The figures rest on three incidence judgements. The first is how a social tenant's rent saving splits between the tenant and the Exchequer through housing benefit and Universal Credit. The second is how many new tenants come from temporary accommodation, private renting or concealed households. The third is what share of lost hope value falls on households rather than companies and institutions. These are static first-round effects in 2030. They exclude the second-round macro effects shown above: ≈70,000 extra jobs, slightly higher prices and interest rates ≈0.1 point higher. They also exclude construction workers' wage gains and any fall in market rents from extra supply. Averages within groups mask wide variation by region and household type. The figures lean on the English Housing Survey, the Regulator of Social Housing's statistical data return, ONS private rental price statistics, MHCLG temporary accommodation statistics, DWP housing-support caseloads, and the ONS Effects of Taxes and Benefits and HBAI income distributions.