The 2026 Budget introduces a new range of policy measures relevant to social housing providers including housing associations, registered providers (RPs) and local authorities involved in the delivery and management of social housing.

Housing features prominently in this Budget, reflecting the shortage of affordable homes, loss of council housing and the growing number of households living in temporary accommodation.

Key announcements include additional funding for affordable housing, VAT relief on land transactions, additional funding to tackle homelessness and extended access to cheaper borrowing for councils. The Budget also introduces measures to support first-time buyers and help manage household energy costs.

While further detail is needed to understand how some of the measures will operate, the Budget creates opportunities to support housing delivery and improve the viability of development projects.

This insight considers the principal announcements for RPs and the potential implications for their development programmes, existing housing stock and wider operations.

Additional funding for affordable housing

Chancellor John Healey announced more than an additional £1 billion for the Social and Affordable Homes Programme (SAHP), taking total planned investment over the next 10 years above £40 billion. This marks a change from the Autumn Budget 2025, when Chancellor Rachel Reeves confirmed no new specific capital commitments, with the Government instead relying on funding announced earlier in the year.

For RPs, this could provide further opportunities to progress development schemes and bring forward schemes that are currently constrained by development costs, financing requirements or viability concerns. The extent of the benefit will, however, depend on how the additional funding will be allocated, which schemes will qualify or when it will become available. Providers should therefore await further guidance before factoring the funding into their development plans.

The additional funding is a positive signal of continued government support for affordable housing and is intended to support the delivery of more new homes. This aligns with the Government's ambition, set out in the 2025 Budget, to increase housing supply and support the delivery of 1.5 million new homes.

VAT-free land sales to social housing providers

In the Autumn 2025 Budget, the Government indicated that it would consult on proposals for VAT reform that aims to incentivise the development of social housing. The 2026 Budget has announced the introduction of a VAT relief for land sold to social housing providers, although further detail is awaited regarding its scope and operation. The new relief is intended to take effect from 1 April 2027.

VAT can increase the upfront costs of land acquisition and influence how land transactions are structured, particularly where an RP needs to acquire a site before construction has progressed sufficiently to meet the requirements of existing VAT arrangements. The removal of VAT from qualifying land sales could therefore simplify transactions and improve the financial position of development schemes by reducing the upfront cost of acquiring development sites. It also remains to be seen how this new relief will affect the appetite for both RPs and developers to continue using ‘golden brick’ structures which are widely used as a means to accelerate both the transfer of land to the RP and sale receipts to the developer whilst ensuring no adverse VAT treatment.

This is one of the most practically significant announcements for RPs with active development programmes. RPs should consider how the relief could affect the cost and financial structure of their land acquisitions and factor any available savings into their development plans. The extent of the benefit will depend on the scope of the relief and the applicable eligibility criteria. Appropriate tax and legal advice will remain important when progressing land acquisitions.

As the detailed legislation and guidance is not intended to be published until early 2027, providers should exercise caution before revising financial appraisals or development assumptions based on the announcement alone.

First-time buyer support

The Chancellor announced a new ‘Your First Home’ scheme, backed by £4.7 billion of Government-supported lending. Eligible first-time buyers purchasing a qualifying new-build home will be able to buy with a 2.5% deposit and benefit from a Government equity loan. The Budget also announced a new First Time Buyer ISA, intended to support prospective purchasers in saving for a deposit.

Although these measures are primarily aimed at increasing homeownership rather than delivering affordable rented housing, they may be relevant to RPs developing mixed-tenure schemes or developments that include homes for sale. Increased access to homeownership could support demand for shared ownership products, other affordable homeownership schemes and open market sales, potentially improving sales rates and supporting the viability of development schemes.

The Your First Home scheme is expected to launch in 2027, with further detail on eligibility and operation still to be published. Providers should therefore await further guidance before incorporating the scheme into development appraisals or sales assumptions.

While the scheme may support demand for new-build homes over the longer term, there is a possibility that some prospective purchasers may defer buying decisions pending its introduction.

Homelessness and temporary accommodation

The Budget also includes additional funding for measures aimed at tackling homelessness and reducing reliance on temporary accommodation. This translates to a further £432m being added to the initiative to give every rough sleeper support to move them off the streets before Christmas. The Government has linked these measures to its objective of increasing the supply of affordable housing and reducing the number of households reliant on temporary accommodation.

While the additional funding is welcome, pressures on homelessness services and temporary accommodation provision are likely to remain significant in the short to medium term. Increasing the supply of affordable and social housing will take time, meaning many councils may continue to face challenges in securing suitable accommodation for homeless households. In particular, the Budget does not include an increase to Local Housing Allowance rates. As a result, affordability pressures in parts of the private rented sector may continue, particularly where market rents significantly exceed Local Housing Allowance levels. This may contribute to continuing demand for homelessness services, temporary accommodation and affordable housing.

For RPs, this may result in continued demand from local authority partners for affordable housing, nomination arrangements and collaborative initiatives aimed at helping households move from temporary accommodation into more permanent homes. Over the longer term, any increase in the supply of genuinely affordable housing could help reduce reliance on temporary accommodation and support more sustainable housing outcomes.

Planning, biodiversity and building regulations

The 2026 Budget confirms there will be major changes to building regulations during this Parliament, except where changes are critical for safety. Alongside this, the Government has announced plans to remove biodiversity requirements for brownfield sites. Brownfield land generally refers to previously developed land such as former industrial or commercial sites.

Changes to biodiversity requirements could reduce costs or simplify the planning process for some brownfield schemes. This may be particularly relevant to providers seeking to bring previously developed land back into use, potentially making housing schemes financially feasible and supporting the delivery of additional homes.

Providers with brownfield sites in their development pipeline may therefore wish to consider whether the changes could make previously unviable schemes more feasible or create opportunities to bring forward developments that had previously been delayed. Any potential benefits will need to be considered with the applicable planning, environmental and building safety requirements.

Council borrowing

Government is seeking to support council house building by maintaining the borrowing rates for council house building through the Public Works Loan Board for a further year. The focus is on increasing the supply of council housing and homes for social rent, in line with the Government's broader objective of addressing housing need and boosting housing delivery.

Although this measure is principally relevant to local authorities, it may also be relevant to RPs that work in partnership with councils to deliver affordable housing via development agreements, joint schemes and other delivery arrangements.

Household costs

Measures are to be put in place to ease household energy costs. The Chancellor announced an energy cost payment for approximately 20 million homes in council tax bands A to D. The Budget also included an extension of the reduced rate of VAT on electricity, with the 0% rate continuing until July. These measures are intended to help households manage rising energy bills and provide financial relief to those facing cost of living pressures.

For RPs, these measures can help alleviate some of the financial pressure on residents by reducing household expenditure and improving disposable income. This could support rent affordability and reduce the risk of arrears.

Wages

The Budget confirms a 3.9% increase in the national minimum wage and the national living wage from April 2027. The National Living Wage will increase by 3.9% to £13.21 per hour, increasing the gross annual earnings of a full-time worker on the National Living Wage by approximately £910.

For RPs, the increase is likely to result in higher employment costs. These additional costs will need to be reflected in operating budgets, business plans and financial forecasts.

Pensions

Effective from now until 31 March 2032, relief from Stamp Duty Land Tax (SDLT) has been introduced on transfers of property from Administering Authorities in England and Northern Ireland into qualifying pooled investment vehicles that have been established by Local Government Pension Scheme (LGPS) pool companies.

This relief has been introduced in recognition of wider government reforms to drive consolidation within the LGPS and is intended to reduce cooperating costs, offer a more competitive and attractive investment opportunity, and support the government’s aim of promoting growth and investment in the UK.

Capsticks’ view

Overall, the Autumn Budget 2026 signals continued Government support for affordable housing, with additional funding for temporary accommodation, first-time buyers and the proposed VAT-free treatment of land sales to social housing providers and continued support for council housebuilding through borrowing arrangements. The measures relating to planning, biodiversity requirements and support for first-time buyers may also facilitate housing delivery.

Whilst the additional investment is welcome, significant pressures remain across the sector. Demand for genuinely affordable housing continues to outstrip supply, and many local authorities remain under considerable pressure in relation to homelessness and temporary accommodation. The extent to which the measures announced in the Budget alleviate those pressures will depend on how quickly they translate into additional homes on the ground.

For RPs, the focus will be how these announcements translate into practical opportunities to increase housing supply while continuing to invest in existing homes. Further guidance will be needed before providers can assess the full impact of several measures.

In the meantime, RPs should review their development pipelines, land acquisition plans and budgets while keeping up to date on further guidance on implementation and eligibility.

The measures are broadly positive for the sector, but their overall impact will depend on whether the funding and proposed reliefs translate into viable schemes and lead to a meaningful increase in genuinely affordable homes.

How Capsticks can help

Capsticks’ housing team provides a full service to over 200 registered providers of varying size across the country. From development and regeneration, planning and security charging, to housing management and asset management, we will support you to manage your stock and finances.

If you have any queries around the discussion in this insight, and the impact of the Autumn Budget on your organisation, please speak to our Head of Housing Susie Rogers to find out more about how Capsticks can help.