Council housebuilding funding gap puts a £47bn price on Burnham’s social rent pledge
Andy Burnham wants the biggest council housebuilding programme since the post-war period. New research suggests the council housebuilding funding gap standing between that ambition and reality runs to £8bn, and that is only if the Prime Minister settles for the modest version of his own promise. The Resolution Foundation, publishing on 24 July 2026, estimates that delivering 300,000 homes for social rent by 2036 would cost roughly £47bn, against a £39bn pot that is already spoken for.
What £39bn actually buys
The Social and Affordable Homes Programme, introduced under Sir Keir Starmer, commits £39bn to social and affordable housing over a decade. It targets around 300,000 affordable homes, with at least 60 per cent for social rent, let to council-approved tenants at roughly 50 per cent of the market rate.
Mr Burnham has argued for pointing the entire fund at social rent alone, redirecting money away from housing associations and towards councils.
The arithmetic does not oblige. According to the Resolution Foundation’s Housing Outlook for the third quarter of 2026, spending all £39bn on council homes for social rent would deliver only around 249,000 units over the ten years. Closing the gap to 300,000 requires a further £8bn.
Scaling up to the levels the Prime Minister invokes is a different order of problem again. Local authorities were building roughly 109,000 homes a year in the 1970s. Getting anywhere near that would demand sums nobody has yet identified.
“If you want to go much higher to post-war era levels of building that the prime minister talked about a few weeks ago, you can’t do that under the current funding envelope,” said Hannah Aldridge, senior research and policy analyst at the Resolution Foundation and author of the research. “You’re going to have to find more money for that.”
The unfunded pile is growing
The housing numbers land at an awkward moment. Questions have been raised this week about several other pledges with no visible funding attached, including an £850m VAT cut on electricity bills, the £2 cap on bus fares outside London, and a 20 per cent business rates cut for pubs, clubs and live music venues. Mr Burnham has also promised to fix social care and ease living costs, alongside an active review of rent controls that landlords are watching closely.
Britain’s public finances are not in a forgiving mood. Something will have to give.
The cheaper levers
The think tank suggests the Government has options short of writing a bigger cheque. One is loosening the requirement on private developers to deliver social rent homes under Section 106, accepting affordable rent instead, which needs less upfront subsidy and therefore stretches further.
Another is low-cost lending to housing associations through the National Housing Bank, the public financial institution launched in April 2026 to offer cheap loans to registered providers.
“You can pull a few other levers to still achieve quite a high number of affordable homes by recent standards, but to really boost affordable building to post-war eras, the Prime Minister will have to find a lot more additional funding,” Ms Aldridge said.
The need is not in dispute. Government figures show 134,000 families in England living in temporary accommodation, with 1.3 million households on local authority waiting lists.
A government spokesman said: “We will build more council homes and our once-in-a-generation £39bn investment in social and affordable housing will give people a lifeline out of temporary accommodation and into permanent homes.”
What this means for investors
Two implications stand out. If Section 106 obligations are tilted from social rent towards affordable rent, viability improves on stalled schemes and land values firm up, which is quietly good news for anyone holding development stock or buying into new build.
The second is blunter. A government that cannot fund its housing promise looks harder for revenue elsewhere, and the private rented sector has historically been an easy target. With renters already paying more each month than mortgage holders, the political temptation to intervene on rents grows rather than shrinks.
Expect the real answers at the Budget. Until then, the gap between what has been promised and what has been costed is the number worth watching.
