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Rewiring the High Street: Latest announcements on £210m regeneration package

Rewiring the High Street: Latest announcements on £210m regeneration package

Caroline McDade 09 Oct 2026
The Ministry of Housing, Communities and Local Government (MHCLG) confirmed a £210 million capital funding injection on 25 September 2026 aimed at reversing the decline in vacancies across England's town centres. Communities Secretary Angela Rayner then referred to it in her speech at the Labour Party Conference announcing “…a new fund to breathe life back into our high streets. Our town centres should be thriving, the heart of a place where people enjoy a family day out or an evening with their mates – with cafes, shops and pubs open for business, and jobs for local people too”.
 
Reflective of the government’s commitment to backing communities, this latest announcement continues the policy shift toward devolution through funding support and local controls for bringing boarded-up and long-vacant high-street property back into productive use.

 

The Funding Offer

 

The capital funding package comprises the following targeted funding streams:
 
  1. Derelict Buildings Fund (£125m): Allows local authorities to acquire, remediate, and repurpose unsound or long-term vacant commercial buildings - such as redundant department stores, cinemas, and shopping centres - into more tailored local uses such as shared workspaces, health centres or civic spaces.
     
  2. Community Asset Rescue Scheme (£65m): Expands existing localised intervention approaches (such as the Pride in Place initiative) to safeguard valued local assets, such as pubs and shops, from being lost.
     
  3. High Street Rental Auctions and Co-operative Infrastructure (£20m): Splits funding equally between the scaling up of High Street Rental Auctions (HSRAs) programme to penalise landlord inertia on properties vacant for over 12 months, and dedicated support for establishing and growing co-operatives. 

 

Funding Stream
Allocation
Purpose
Derelict Buildings Fund £125 Million To support local authority asset acquisition, remediation, and conversion of important civic and community buildings.
Community Asset Rescue Scheme £65 Million Micro-level grants to safeguard local social infrastructure, clubs, and heritage spaces.
High Street Rental Auctions Programme £10 Million Introduced by the Levelling Up & Regeneration Act 2023. Provides powers to local authorities to auction properties to find tenants where they are vacant for over a year in a two year period in designated areas.
Co-operative Development Programme £10 Million Help mayors and strategic authorities to set up and run more mutual and co-operative businesses.
 
This funding announcement directly links with the broader agenda to empower regional strategic authorities and the mayors. By decentralising fiscal retention capabilities - such as allowing select mayoral authorities to retain localised proportions of income tax from 2028 - the government has identified high street regeneration as an opportunity for regional macro-economic growth.
 
Whilst a £210 million allocation sounds a lot and may inject some vital capital momentum, it is funding from an existing pot, so it is not new money. Nevertheless, many local areas know the assets that this funding could help, like in Swindon, where the derelict Mechanics' Institute and Oasis Leisure Centre could be regenerated with the Derelict Building Fund. Converting deeply compromised structural formats like mid-century cinemas or multi-story shopping centres into decentralised healthcare hubs or civic spaces comes with its challenges. These buildings usually have significant upfront capital requirements which this funding will not be sufficient in addressing and there may also be viability questions around any future alternative use. Local authorities will often need to secure institutional development partners to stretch this funding across various phases to deliver long term change. On this basis, it may be some time before we see much improvement in our high streets.
 
Any immediate results playing in to Andy Burnham’s agenda of delivering ‘growth in every postcode’ and rejuvenating high streets, may come from the formalising of HSRAs. If local authorities can identify landlords holding long-term vacant assets or portfolios of assets, the ‘threat’ of an auction to find them a tenant may trigger some proactive repositioning before the compulsory auction process commences. Broxtowe Borough Council is one such authority who has claimed to use the new powers successfully[1]. North Northamptonshire Council has also been consulting on designating part of Wellingborough town centre for the HSRA programme[2].
 
Whether this injection of funds and controls to tidy up our high streets makes a noticeable change remains to be seen. Some of these funding announcements have limited details on the application process, eligibility or conditions that might be attached to them.
 
It will take experienced local authorities to navigate the application processes and understand the pooling of funds that might be necessary to secure the money to deliver on their ideas, against a backdrop of stretched resourcing. Once the funding is received, it also requires local authorities and their partners to be skilled in using a mix of planning levers to deliver change before any spending conditions lapse.
 
Later this year, the government will go further still, publishing a full high streets strategy which should be a comprehensive guide on how it all fits together, eligibility and how the funding might be allocated, which is eagerly awaited.
 
Footnotes

 

[1] “Council first in the UK to serve a High Street Rental Auction notice” - West Bridgford Wire (20 September 2025)

[2] High street rental auctions | North Northamptonshire Council

  

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Co-living policy: Shared Living beyond London

Co-living policy: Shared Living beyond London

Adam Donovan 07 Oct 2026
Changing Context
Lichfields’ blog series has charted the rise of co-living in London over the last half-decade, to its current status as an established form of housing against the backdrop of an otherwise challenging residential market. Several years in, policy has now largely caught up with these applications, with recognition in most London boroughs’ local plans, positive adopted and emerging London Plan policy and established standards set out in London Plan Guidance.
Beyond the capital, the same pattern is beginning to appear, though it is still early days. Operational co-living schemes and applications have begun to spring up in cities across the country, including Manchester, Leeds, Brighton, Bristol and Birmingham, but at present, policy recognition is sparse. As a result, applications can face extensive negotiation to establish the land use principle and basic elements of co-living form, such as room sizes and amenity provision, all of which, in London, are grounded in policy.
This is set to change, however. The transition to a new plan-making system has brought about a flurry of plan-making, with approximately 90 local planning authorities (LPAs) either set to submit a plan this year under the previous system or ordered to commence plan-making this year under the new system, according to Lichfields’ estimates. With some of these LPAs responding to their first co-living applications, co-living policy is beginning to populate these emerging local plans for the first time nationwide. 
The recently published NPPF (August 2026) adds to this policy momentum. For the first time adopted national policy recognises co-living as a specialist form of accommodation, and sets out a specific definition and provides a positive national platform for co-living.
  
In which areas is co-living policy appearing?
Lichfields has studied the trend of co-living policy outside of London. We have looked at the state of policy coverage in adopted plans, emerging plans, and supplementary planning documents (SPDs) in the 84 LPAs most likely to see co-living activity. This comprises the 35 most populous urban areas outside of London, university towns, and commuter towns around London.
Of these 84 authorities, only Salford and Watford refer to co-living in their adopted local plans. Four more authorities provide co-living guidance in SPDs (Birmingham, Leeds, Brighton and Hove, Chelmsford[1]). In combination, this policy and guidance equates to just 7 percent of the LPAs reviewed leading this new policy frontier. This is less than 2% of all LPAs in England. 
When emerging plans and draft SPDs are taken into account, however, the proportion of LPAs which discuss co-living in policy and guidance grows to more than 25 percent of these reviewed authorities (6% across all LPAs in England). This trend is concentrated in the largest cities: of the ten largest cities outside London, seven include co-living in their emerging local plans or guidance, up from just two (Salford and Watford) at present. These cities are: Birmingham, Leeds, Liverpool, Sheffield, Bristol, Coventry and Nottingham.
 
 
Co-living policy recognition is therefore becoming more common, although it is still focused in a relatively small number of areas in the context of such a significant opportunity. The language of emerging plans does indicate the momentum of this trend however: some emerging plans borrow or take as a starting point policies adopted elsewhere, aiding policy formulation and lending a common pattern to co-living policies emerging across the country. The rest of this blog covers these patterns in more detail.
  
How do emerging plans approach co-living?
In general, emerging plans take a positive approach to co-living. As opposed to London, where some authorities have sought to introduce policies intended to restrict co-living, the tone is supportive in almost all emerging plans elsewhere.
Plans tend to take a strict approach to locational requirements, targeting co-living in accessible locations and established centres. But, provided these locational considerations are met, authorities are encouraging of co-living schemes. In particular, many plans consider co-living to be a more affordable alternative to renting conventional C3 housing and welcome the use accordingly.
Beyond this generally receptive baseline, plans differ greatly in the level of detail they provide for co-living policy. Some plans stop there, with three plans referencing co-living but not providing any policy details[2], while other plans cover co-living either alongside other forms of specialist accommodation (typically build-to-rent and student accommodation) or in a bespoke policy. Though these policies all cover similar themes – location, affordable housing, space and amenity standards, and management policies – the level of detail provides more variability than the policy approach itself, as set out below.
  
Location and need requirements
In the 84 authorities reviewed, location typically emerged as the biggest concern for co-living. Nearly 80 percent of authorities with policy or guidance provided explicit location requirements, all of these directing co-living towards well-connected areas, town centres, or both. This makes sense: co-living is typically large scale, high-density development most appropriate in areas well-served by public transport, and Lichfields’ research into London schemes has found that most of these are found in highly accessible locations. Policies typically encourage cycle parking provision, with a minority of plans specifying or encouraging that co-living provide only accessible parking spaces, making accessible locations yet more important.
Nearly a quarter of plans further specify that co-living should not jeopardise the delivery of conventional housing. These policies typically state that applications on land currently used or allocated for C3 housing will not be approved, which, when coupled with town centre requirements, shrinks the pool of available land for co-living quite substantially. Lichfields’ view is that this approach is not necessarily appropriate in all instances. Whilst there is clearly a pressing need for C3 homes, this is also true off all forms of residential accommodation, including co-living, which has an important role to play in meeting local housing needs. A ‘C3 first’ approach runs the risk of preventing sites which could be better suited for co-living accommodation, or a mixture of both C3 and co-living, from coming forward. 
Six authorities – half of which also fall into the previous group adopting a ‘C3 first’ approach – require co-living applications to demonstrate need, while four set limits on co-living concentration. These limits are typically based on planning judgements, such as in Milton Keynes’ emerging plan, which states that co-living proposals will be supported where they “create or maintain a mixed and balanced community within the wider neighbourhood and do not result in an over-concentration of that type of home in that location”, in addition to being in highly accessible locations within settlement boundaries.
 
 
Affordable housing
Authorities differ quite significantly in their approach to affordable housing for co-living schemes, both in type and quantity. This is to be expected given that affordable housing policies respond to specific local need and housing markets. Affordable housing policies typically ask for a payment in lieu, but this is not always the case and a sizable minority of plans actively support on-site affordable housing. Whilst London boroughs typically specify that on site affordable housing alongside co-living should be separate, self-contained C3 housing, many policies outside London merely defer to their generic affordable housing policy in the context of co-living without considering the implications of this.
The level of affordable housing promoted by policy typically ranges between 20 and 35 percent, though there are exceptions to this. Birmingham’s emerging plan, for example, calls for a payment in lieu equivalent to 50 percent affordable housing (by unit), a sizeable increase from its existing SPG, which seeks 35 percent. Brighton and Cambridge set the level at 40 percent, either to be delivered on-site or through a payment in lieu, while Trafford has a sliding scale between 25 and 45 percent depending on the location. At the other end of the spectrum, Canterbury and Portsmouth do not ask for any affordable housing, considering co-living to be an affordable product in and of itself.
 
 
Space and amenity
The variation in policy detail is perhaps most evident in space and amenity policies, which is again to be expected. The London Plan Guidance (LPG) sets specific standards for floorspace and amenity expectations – a minimum room size of 18 sqm and recommended amenity space of 4 sqm per resident for the first 100 residents, tapering down to 2 sqm per resident past 400 residents. However, less than half of LPA policies outside London provide similar quantitative standards.
Of these, just three follow the LPG’s room minimum of 18 sqm, with other plans ranging from 25 to 37 sqm, in line with the nationally described space standard for a one bedroom (i.e. C3; non-co-living) flat. The LPG sets a maximum room size of 27 sqm, to avoid blurring the line with self-contained C3 flats. It is unclear whether authorities setting these large standards have fully considered the implications of conflating the floorspace expectations of co-living and C3 flats.
The more common approach, however, in just over half of policies, is to not set room standards at all, instead calling for “adequate” or “well-designed” living space. While a qualitative approach can provide welcome flexibility, in Lichfields’ experience this can cause issues at the decision-making stage, as officers and committee members may not be familiar with room standards in co-living or have access to comparable schemes. In our view, it is preferable for policy to set realistic floorspace standards for co-living units which provide some flexibility and are differentiated from the national standards for C3 flats. The approach in the LPG is appropriate. 
Quantitative standards for amenity space are fewer and further between, found in only a third of authorities’ policies. Where such policy standards do exist they tend to be more in line with LPG levels, promoting either 4.5 sqm per resident or 4 sqm tapering to 2 sqm with over 400 residents, as in the LPG.
 
Other policy issues
Plans are more consistent when it comes to building management, with most specifying that a management plan is needed and often setting minimum tenancy lengths to provide security of tenure and to avoid co-living homes from being used as hotel accommodation. Some policies also dictate that the design of co-living schemes should provide inbuilt adaptability, to allow for alternative uses with minimal conversion should a change of use be needed in the future. This issue is now being raised frequently on Lichfields co-living projects and typically requires submission of a design study to evidence a scheme’s inbuilt future proofing and adaptability should need and the market pressures change.
 
Conclusion
The present state of co-living across the country is in many ways reminiscent of the position in the capital five years ago. Applications for co-living have begun to come forward in increasing numbers, but a policy lag means that local plan policies are rare and many applicants are faced with a policy vacuum. The current state of policy in London is therefore perhaps a sign of what is to come, with policy coverage the norm in the capital and convergence between plans to allow for standardised approaches. This is likely to increase following the recent publication of the new NPPF.
Certainly, the evidence suggests this is the direction of travel. Outside of London, co-living is virtually non-existent in adopted plans, but emerging plans – especially in large cities, the majority of which have drafted co-living policies – are covering co-living in increasing number.
While many of these early policies are light on detail, the tone of these emerging plans is also encouraging. In almost all plans, LPAs are recognising the value of co-living as a more affordable alternative with some distinct advantages, in sociability and flexibility, to conventional housing.
As the policy map continues to be populated, the greater certainty provided by co-living policy in urban authorities across the UK should encourage yet more applications to come forward. This virtuous cycle of co-living policy coverage and delivery, though still in very early stage across most of the country, looks set to accelerate.
 
Footnotes 
[1] Watford also provides co-living SPG, in addition to the policies in its adopted plan.
[2] Leeds, Luton and Sheffield, albeit Leeds covers co-living in more detail in an SPD and Luton’s plan is in early stages of development.

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‘Moving in the right direction’: Roadside facilities and the August 2026 NPPF

‘Moving in the right direction’: Roadside facilities and the August 2026 NPPF

Ryan Barrett 02 Oct 2026
Roadside facilities are an essential part of the UK’s transport infrastructure. For motorists, the need for safe and convenient places to stop, rest, refuel and recharge is clear. That is not to say, however, that it has historically been straightforward, in planning terms, to make the case for roadside facilities, given their typical location alongside the strategic road network which means they are commonly located outside defined settlements. Whilst national and local planning policies recognise the importance of the safe operation of the highway network, the role of roadside facilities in achieving this is often overlooked.
However, the new NPPF, published in August 2026, provides potentially the biggest national policy change relating to roadside facilities in over a decade. For the first time, roadside facilities are explicitly recognised as important infrastructure with their own distinct policy.
 
What are roadside facilities?
Roadside facilities are more than simply places to refuel or recharge vehicles. They are multifunctional hubs that provide rest areas for drivers, essential welfare facilities such as toilets, and access to food and retail offerings.
As such, roadside facilities perform an essential welfare and safety function for road users, although this is often overlooked by decision-makers.
Whilst the NPPF does not define roadside facilities, National Highways defines roadside facilities as:
“a service area, petrol filling station or truckstop where a customer might reasonably expect to be able to park their vehicle to rest, buy fuel, food, drink and retail goods, charge an electric vehicle or other ultra-low emission vehicle and/or use a toilet.” [1]
As is clear from the above, roadside facilities can vary in scale and offering, ranging from small-scale petrol filling stations to large-scale motorway service areas.
The development of modern roadside facilities, notably those that promote or focus on electric vehicle charging, is also important in helping to decarbonise our transport network.
Roadside facility developments will have a crucial role to play in rolling out EV charging infrastructure nationwide and helping to achieve a net-zero transport network. The Government aims to deliver over 300,000 EV charging points on the road network by 2030, with a robust and reliable charging network essential to encouraging the widespread adoption of electric vehicles. As explored in my blog post last year, ‘Planning Challenges: Decarbonising the UK Transport Network’ (read here), numerous planning challenges have stifled the rapid delivery of EV charging across the strategic road network. Policy support in the new NPPF should help to address this.
 
Moving in the right direction: The policy change of the NPPF
A range of sweeping policy changes has been introduced in the August 2026 NPPF. The following three policies are most relevant to roadside facilities:
 
  1. Policy S5 – Principle of Development Outside Settlements
  2. Policy TR1 – Vision-led approach to Planning for Transport
  3. Policy TR5 – Roadside Facilities
Policy S5 sets out national policy for development outside settlements and defines limited acceptable exceptions for development outside settlement boundaries.
It is welcome that roadside facilities are listed as a form of development that is acceptable outside settlements, subject to the ‘presumption in favour of development’ balance, whereby the benefits of providing the development should outweigh adverse effects. Recognition of the specific operational requirements of roadside facilities is crucial because, given the need for facilities to be located on the strategic road network, they are often situated outside settlements. This is a positive change.
Policy TR5 sets out the criteria for the development of roadside facilities outside settlements. In summary, proposals should:
·         meet an evidenced need to improve the safety and welfare of road users; or
·         improve access to EV charging or alternative fuels if new or significantly expanded facilities are proposed.
The policy also recognises the need to provide overnight lorry facilities where there is an identified deficiency.
This policy also aims to prevent the loss of existing roadside facilities unless alternative provision is being made, or it can be demonstrated that the facility is not needed or is no longer viable. Again, this demonstrates the national importance of roadside facilities on the strategic road network by ensuring they are retained where possible.
This new standalone policy relating to roadside facilities should encourage roadside developers and road users alike, as it recognises the important role these facilities play as key infrastructure.
 
A requirement to demonstrate ‘need’
A crucial part of compliance with Policy TR5 is demonstrating a need for roadside facilities.
While the NPPF does not prescribe a specific methodology, Lichfields has developed a robust approach to assessing the need for roadside facilities, covering both traditional fuelling and electric charging. Our methodology combines quantitative analysis with qualitative judgement, taking into account the scale, quality and range of services available at existing facilities. We also use GIS mapping to present this evidence clearly and spatially and to identify gaps in provision across the network. This approach provides a strong evidential basis for demonstrating need in a given area and supporting planning applications for new or enhanced roadside facilities.
The emphasis within Policy TR5 on improving access to EV charging is welcome and represents an important policy distinction if the Government wishes to achieve its aforementioned goal of providing 300,000 EV charging points on the road network by 2030. This theme also continues in Policy TR1.
Policy TR1 requires sustainable transport to be considered from the earliest stages of plan-making. Importantly, this includes planning positively for transport facilities that need to be located in an area or for their expansion and adaptation, such as roadside facilities on the strategic road network.
 
Room for improvement?
While the new NPPF is positive overall for road users, for those seeking to bring forward roadside developments and for efforts to decarbonise the road network through EV charging, the policy could have gone further in some areas by providing additional support for roadside development proposals.
In our experience, there is a lack of clarity and understanding about what constitutes a ‘roadside facility’ development. This ambiguity can delay the planning process, with some local planning authorities failing to recognise that smaller facilities can constitute roadside facilities and perform an essential road safety and welfare function.
To provide clarity and certainty, national policy should adopt a definition of ‘roadside facilities’ aligned with the National Highways definition referred to above.
This would remove ambiguity in the interpretation of the policy. It would also provide greater confidence to developers and local planning authorities, helping to accelerate the planning process.
The August 2026 NPPF does not acknowledge that roadside facilities often need to be supported by ancillary facilities, such as shops, cafés and restaurants. These uses are important because they help provide a meaningful welfare offer for road users, while also supporting the commercial viability of roadside facilities.
As a result, proposals for roadside facilities can become caught up in retail policy tests, including the sequential assessment, which seeks to direct main town centre uses, such as shops, cafés and restaurants, towards defined town centres. However, the specific function of roadside facilities means they are not normally suitable for town centre locations. Requiring proposals for roadside facilities to demonstrate compliance with the sequential test can therefore create an unnecessary burden for applicants and local authorities alike. National policy should recognise the distinct characteristics of roadside facilities and the need for supporting facilities that provide for the welfare of road users outside defined town centres, thereby reducing unnecessary policy hurdles.
 
 
Summary
In summary, the August 2026 NPPF represents a positive step forward for proposals for roadside facilities. Further guidance would, however, be welcomed to reduce ambiguity and avoid unnecessary burdens arising from retail policy tests. Overall, the updated NPPF provides greater clarity on what is expected of proposals for roadside facilities and should help accelerate the delivery of EV charging infrastructure, which will be crucial to achieving a net-zero transport network. It should also support the delivery of the wider roadside infrastructure needed to meet the expectations of the modern motorist.
 
 
Footnotes

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Payback for build out: the PM’s case for social housing

Payback for build out: the PM’s case for social housing

Matthew Spry 14 Sept 2026
At Prime Minister’s Questions on Wednesday 9th September, Andy Burnham argued that a major council housebuilding programme could save billions in Housing Benefit,[1] describing it as “the Labour way”.[2]
The PM referred to research from the National Housing Federation (NHF), which is seemingly the 2024 report by CEBR for NHF and Shelter.[3] It estimates that 90,000 Social Rent homes would generate £86.5bn of gross economic and social benefits over 30 years, including a net Exchequer benefit of  £11.896 billion.
The report makes a strong strategic case for Social Rent. But its use in a debate about reducing welfare spending (to increase defence spending to 3.5% by 2035) raises three initial questions:
 
  1. Do Housing Benefit savings pay for Social Rent homes?

  2. How dependable are the other benefits? and

  3. Where does the necessary funding come from?

 

There is also – as ever – a fundamental land and planning question about whether Section 106 can deliver the assumed cross subsidy the NHF/Shelter analysis requires of it.[4]
 
  

What the report says

 

The analysis covers a single annual cohort of 90,000 homes.[5] Although the wider proposition is a ten-year programme of 900,000 homes, CEBR does not model successive cohorts and notes that their operating environment and assumptions may differ. [6]
 

Table 1: The Report's Key Measures

Key Measure
Figure
Social Rent homes 90,000
Total development cost  £35.367bn
Government grant  £11.825bn
Provider and other funding c.£23.5bn
Initial annual Housing Benefit saving £243.8m
Housing Benefit saving, 30-year PV £4.485bn
Gross Exchequer benefits £23.721bn
Net Exchequer benefit £11.896bn
Gross socioeconomics benefits £86.5bn
Net socioeconomic value £51.183bn

 
Source: CEBR

 

The £11.825bn grant required for one cohort is about three times the current programme’s average annual investment of £3.9bn, under which the Government expects 18,000 Social Rent homes a year.[7]
 
 

Do Housing Benefit savings pay for Social Rent homes?

 

No, and the NHF/Shelter report does not claim they would. The £4.485 billion saving is a discounted 30-year present value, compared with £11.825bn of government grant. The initial annual savings is £243.8 million.[8] 
That estimate is based on a series of linked assumptions, for example, that 75% of occupants receive housing support and that vacancy chains ultimately release 65,292 homes to households otherwise living in the private rented sector, generating an annual rent-support saving of £3,735.5.  Yet lettings data shows tenants come from a varied set of previous tenures and circumstances. Actual savings would depend on the circumstances and previous tenures of those housed.[9]
 
 

How dependable are the other benefits?

 

Of course, the potential savings for the Government are not limited to Housing Benefit (see Table 2), and the total (including housing benefit) is estimated at £23.8bn against a government grant for the programme of £11.8bn.

Table 2: Exchequer benefits from building 90,000 social rented homes

Exchequer benefit
30-year present value
Housing benefit saving £4.485bn
Tax revenue from construction £2.473bn
Universal credit saving £3.289bn
Healthcare saving £5.170bn
Homelessness-services saving £4.512bn
Income Tax and NI from employment £3.793bn
Gross Exchequer benefit c.£23.7bn
Less government grant £11.825bn
Claimed net Exchequer benefit £11.896bn

Source: CEBR, Table 12

This wider fiscal case is credible in principle: secure housing can reduce homelessness and healthcare pressures and support employment.[10]  But the estimates vary in robustness. Rent and temporary-accommodation savings follow relatively directly from lower housing costs. Healthcare, employment and tax benefits depend on longer causal chains, while construction taxes are net additional only to the extent that the programme does not displace other activity. The £23.7bn total should therefore be understood as a modelled estimate, not a guaranteed fiscal return.
 
 

Where does the necessary funding come from?

 

The NHF/Shelter report assumes £35.367bn of total development cost. Government provides £11.825bn of grant towards 60,000 homes; the remainder comes from provider resources, borrowing, rents and market activity, while 30,000 homes are assumed to be delivered without grant through cross-subsidy such as Section 106. The claimed fiscal return therefore depends not only on public grant but also on about £23.5bn from other sources.[11]
The funding ask is demanding:
 
  1. The £11.825bn Government grant would need to be funded through borrowing, taxation, or savings. Given the current state of the public finances, it is reasonable to assume any programme of this kind would rely on borrowing. For all the long term benefits, it is not clear this uplift in funding would improve the Chancellor’s near-term fiscal headroom.[12]
     
  2. Registered Providers face higher borrowing costs and increased spending on existing homes, while councils face construction-cost inflation, retrofit and safety obligations, and wider financial pressures.[13] The model treats the availability of this funding as an input rather than testing whether the sectors can provide it. In 2024/25, excluding s.106 homes, the sector itself delivered around 40,380 affordable homes, of which just 8,600 were Social Rent.[14] The Regulator of Social Housing reports on the 2025 Global Accounts of private Registered Providers says: “Providers continued to spend record amounts on improving the quality and safety of existing homes whilst also maintaining investment in new supply. When combined with higher rates of interest on new and refinanced debt, financial capacity remains constrained and some financial indicators have weakened at a sector level.”[15]
     
  3. Meanwhile, 2024 research by UCL found whilst Council housebuilding is a mainstream activity, local authorities face a combination of obstacles, including construction-cost inflation, higher borrowing costs, housing-safety and retrofit obligations, wider local-government financial pressures and uncertainty over future planning and funding arrangements.[16]

 

Can the sector increase its total volume by 50% with a shift in its tenure towards a product with a lower revenue stream?[17] Obviously, the NPPF reforms and more Government funding as suggested by NHF/Shelter might help unblock latent capacity and address some of these issues.[18] But the report’s modelling still assumes a significant boost in investment from two sectors operating with financial pressures. The report treats funding flows as an input and does not test the realism of it being achieved.
Further, the above numbers relate to a single year. Repeated over ten years, the proposition would imply 900,000 Social Rent homes, £353.7bn of development cost, £118.3bn of grant and about £235bn of other funding. Stable procurement could improve productivity, but sustained demand might also increase land, labour and construction costs. A programme on this scale would therefore require explicit modelling of delivery trajectories, debt capacity, inflation and delivery lags.
Delivering the 60,000 grant-supported homes would also require councils and Registered Providers to act more extensively as developers: promoting and acquiring land, partnering with developers and progressing schemes ahead of plan allocations under NPPF Policies S45 and S5. Increased affordable housing funding can strengthen demand for consented land, but it does not create that land. Supply will take time to respond to the more permissive planning framework.
 
 

The big land and planning question

 

We come now to the third of Social Rent homes that the NHF/Shelter proposition says require no grant because they are funded through S.106.  
Section 106 affordable housing is funded from development value after allowing for construction and finance costs, infrastructure, developer return and a competitive landowner return.[19]  The CEBR results assume this mechanism can deliver 30,000 Social Rent homes each year without grant, but do not test whether that assumption is viable.[20]
 
 
Social Rent and Viability

 

Recent Section 106 delivery of around 20,000 to 26,500 affordable homes a year might make the 30,000-home assumption appear achievable.[21] However, this ignores two critical factors, as shown by Figure 1.
 

Figure 1: Affordable Housing delivered through s.106

Source: MHCLG / Lichfields Analysis

Firstly, s.106 affordable housing delivery is cyclical: it dropped 19% last year to about 23,400 homes, with more units funded by grant. This reflects the widely recognised squeeze in the housing market and difficulties experienced finding Registered Providers who want to take on new stock.[22]
Secondly, only 11–14% of s.106 homes are Social Rent, and annual delivery of those has never exceeded 4,000; the rest is Affordable Rent or intermediate products such as shared ownership.[23]
This reflects the underlying economics. Social Rent generates the greatest benefits through lower rents, but those same rents reduce the value available to fund construction. Without grant, delivery requires lower land values, few competing obligations, a strong sales market, a lower affordable housing percentage, or some combination.[24]
 
 
Overall housing delivery

 

The NHF/Shelter report does not calculate the total amount of market-led development needed to generate 30,000 cross-subsidised Social Rent homes. Our scenario testing below shows how quickly the denominator grows depending on the percentage of the total that is achievable reduces to respond to viability.
Effective affordable housing share
Total homes on market-led schemes
Other homes (i.e. market) within those schemes
20% 150,000 120,000
15% 200,000 170,000
10% 300,000 270,000
5% 600,000 570,000
Adding the 60,000 grant-supported homes produces total annual housing activity of 210,000 at a 20% Section 106 share, rising to 660,000 at 5%. Given the much lower value of Social Rent, achieving 30,000 units at 10% would be highly demanding; at 5%, it would require 570,000 associated market homes. The exercise underlines both the importance of meeting the Standard Method total of about 370,000 homes and the sensitivity of the proposition to viability.
Whatever the precise percentage, delivery depends on a planning system that releases sufficient land and a private market capable of generating the value needed for cross-subsidy. That requires buyer demand, mortgage availability, development finance and confidence that land pipelines can be replenished. Planning reform addresses only the supply side; some form of demand support may also be needed to increase build-out and Section 106 delivery.
 
 

Is the PM’s proposition sound?

 

The ‘housing theory of everything’ is a popular explanation for many societal ills.[25] The Prime Minister is clearly a subscriber. More genuinely additional Social Rent housing can reduce Housing Benefit, temporary-accommodation expenditure and other public-service costs, particularly in expensive housing markets.
The Prime Minister cited the NHF/Shelter research as the basis for his ‘Labour way’ approach to rebalancing public spending away from welfare. Yet the Government’s current grant funding programme for affordable housing – while a significant increase on what it replaced - is just a third of the scale that the NHF/Shelter report advocates. It will deliver some Exchequer benefits, but relative to the total size of the state (£1.29 trillion),[26] the scale will be modest.
What is the case for going further? Under the NHF/Shelter assumptions, one 90,000-home cohort initially saves £243.8 million a year in Housing Benefit and delivers a host of other benefits, including a net Exchequer saving of £11.896bn over 30 years.  
The attractions to the PM of this argument are obvious. But there are nevertheless a series of challenges and unanswered questions: 
 
  1. The report does not show that Social Rent pays for itself through savings on Housing Benefit. The modelled 30-year saving is £4.485bn against £11.825bn of government grant
     
  2. The claimed £11.896bn net Exchequer benefit depends on combining that saving with less direct and inherently less certain assumptions about health, employment, Universal Credit, homelessness and tax receipts. These benefits are plausible, but many are downstream of the direct intervention or subject to other assumptions.
     
  3. Most importantly, the result depends on Government funding only one third of the £35.367bn development cost. Councils, Registered Providers, rental income and market activity must pick up the rest. 
     
  4. Councils and Registered Providers face financial pressures and their capacity to deliver at scale – at least in the short term - is uncertain. 

  5. 30,000 Social Rent homes are assumed to be delivered without grant through cross-subsidy such as s.106. This is the report’s most demanding assumption: 
     
a. Recent s.106 delivery has been below 25,000 affordable homes of all tenures, with only a small proportion provided as Social Rent;
 
b. Currently, around 10-13% of net additional homes each year are delivered through s.106, and this model is under viability pressure. If Social Rent represented 10% of homes on relevant market-led schemes, delivering 30,000 units would require 270,000 associated market homes. At 5%, it would require 570,000. The fiscal proposition therefore relies on land being released at least in line with the Government’s Standard Method target, schemes remaining viable and the private market absorbing homes at a sufficient rate, likely supported by some kind of demand-side assistance.
 
  1. The significance of these points for the Government’s wider agenda for re-balancing spending is this: 
     
a. The net Exchequer benefits depend on the Government achieving 90,000 Social Rent homes through directly funding only one third of the cost. 
 
b. If cross-subsidised homes were not delivered, and the same £11.825bn grant produced only 60,000 Social Rent homes the modelled net Exchequer benefit would fall to about £4bn over 30 years; within the margin of error given the causal chain involved.
 
c. If Government instead had to double its grant investment to £23.65bn because of weaknesses in other funding from Local Authorities or Registered Providers, or viability of s.106, almost all the claimed Exchequer benefit would disappear.

 

The central point is that Social Rent does not sit apart from the wider housing market. Large-scale provision can create substantial public value, but the fiscal return is not axiomatic. In addition to huge questions over public spending, it depends on sufficient land supply, viable development, Section 106 delivery, council and Registered Provider capacity, and a functioning private sales market. Any attempt by Government to go further and faster on its affordable housing programme will need to address those dependencies if it wants to realise the benefits.

 

Footnotes

 

[1] He said: “We have set out plans for the biggest council house building programme this country has seen in a generation. If the right hon. Lady looks at research from the National Housing Federation, she will see that that is the route to save billions from housing benefit.” Hansard, 9th September, Column 1037
[2] See this BBC News Story National security can't come at expense of social security, Burnham says 9th September 2026, accessed 10th September 2026
[3] CEBR, The economic impact of building social housing report produced for NHF and Shelter, February 2024
[4] It wouldn’t be a Lichfields blog without one.
[5] Based on the need analysis in the Glen Bramley’s 2019 research on housing supply requirements
[6] See footnote 6 of the NHF/Shelter report.
[7] MHCLG Policy paper: Social and Affordable Homes Programme 2026-2036: MHCLG policy statement to accompany guidance to bidders from Homes England and the Greater London Authority, 7th November 2025. The 18,000 is out of a total of 30,000 Affordable Homes, with the balance made up by other tenures.
[8] See Sections 4.2 and 5, Tables 12–14, pp. 48–54. The discounted Housing Benefit saving recovers about 38% of the public contribution before financing or opportunity costs
[9] MHCLG, Social housing lettings in England, tenants: April 2024 to March 2025, 13th November 2025. The statistics show the variety of previous circumstances from which households enter social housing, including private renting, temporary accommodation, owner occupation, living with family and friends, and other routes, illustrating the uncertainty around assumptions concerning future vacancy chains and Housing Benefit savings
[10] See for example the analysis here (drawn from the Milburn Review on NEETS) and here (the Lichfields work for HBF on the impact of reducing housing supply)
[11] See the NHF/Shelter report - Section 2.1, pp. 16–17, and Section 4.5, p. 50.
[12] The Debt Management Office's own results show a Treasury Gilt maturing in 2054 priced at a yield of 4.5699% in January 2024, and as high as 5.8168% on 8th September 2026. See UK Debt Management Office Results of Syndicated Offerings
[13] See the NHF/Shelter report - Section 2.4, pp. 32–36.
[14] See MHCLG Table 1000 on affordable housing supply
[15] Regulator of Social Housing, 2025 Global Accounts of private registered providers, 15 January 2026
[16] UCL Local authority Direct Provision of Housing: Fourth Research Report January 2024
[17] Taking an illustrative example of a market rent of £1,500 per calendar month (ONS Private rent and house prices, UK: August 2026 shows average rents of £1,451 in England), affordable rent at 80% equates to £14,400 annually, whereas Social Rent at 50% would be £9,000. This would create a gross annual gap of up to £5,400 per home, which across 30,000 homes would amount to up to £162m before other costs.  See this 2026 Policy Statement on rents for social housing
[18] Just as the Government’s boost in funding for affordable housing in 2025 has been welcomed by NHF for these reasons.
[19] My blogs on LVC (in the context of the debate on hope value) and the Green Belt Golden Rules explored this approach. 
[20] See NHF/Shelter Report - Section 2.1, pp. 16–17, and Section 4.5, p. 50.
[21] See MHCLG Table 1000 on affordable housing supply
[22] Yielding this Government response Policy statement: a roadmap for Section 106 delivery in England, March 2026
[23] See MHCLG Table 1000 on affordable housing supply
[24] See the PPG on Viability. The number of affordable homes currently being delivered by s.106 are the product of Government viability guidance which requires plans to specify and test the amount and type of affordable housing, including minimum Social Rent requirements
[25] The housing theory of everything - Works in Progress Magazine
[26] HMT Public Spending Statistics, May 2026

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