We welcome the government’s £39bn commitment to affordable housing over the next decade, alongside the introduction of a 10-year rent settlement set at CPI +1%.
This is a pragmatic move that will help enable more affordable homes to be delivered across the UK. It also provides the long-term policy stability institutional investors need to scale up their involvement in the sector.
The announcement effectively doubles annual grant funding, from around £1.5bn to almost £4bn. We see the impact of this support first-hand through our work with developers and providers already delivering new homes with backing from Homes England. It’s a vital enabler – helping bring forward more projects, in more places, at rents that are genuinely sustainable for residents and communities.
The rent settlement introduces much-needed certainty. For long-term investors seeking secure, inflation-linked income, a CPI +1% framework over 10 years strengthens the case for affordable housing as a resilient and reliable asset class, and a core part of modern social infrastructure portfolios.
This policy direction reflects a growing recognition of affordable housing’s role in addressing the housing crisis and unlocking broader economic and social value.
At Octopus Capital, we’re focused on investing for the long term in affordable housing. We work closely with local authorities, housing associations and developers to deliver the high-quality homes the UK needs.
