On 11 June, the Chancellor Rachel Reeves presented her first Spending Review since Labour came into power last year. So what are the implications for those who live and work in the private rented sector?
In this blog, we round up the key announcements and their potential impact for the PRS, together with a snapshot of sector reaction.
£39 billion boost for affordable housing is good news for all tenures
Affordable housing emerged as a big winner. Rachel Reeves announced that the Government is “turning the tide against the unacceptable housing crisis” with an investment of £39 billion in a new Affordable Homes Programme over 10 years.
This was, she said, “the biggest boost to social and affordable housing investment in a generation”.
Together with a 10-year social rent settlement at Consumer Price Index +1% and a consultation on the implementation of social rent convergence, this will give the sector the confidence to build and invest at scale.
TDS welcomes this investment in affordable housebuilding. We think it will go a long way to alleviate the pressure on the private rented sector, which has for years housed vulnerable or low-income tenants who would ideally live in social and affordable housing.
Our Voice of the Tenant survey was testament to the impact of the supply-demand imbalance, with over half of private renters saying they found it difficult to find a suitable property.
Data from our Voice of the Landlord survey aligns with other key sources, such as the English Housing Survey, in indicating that the size of the private rented sector is staying broadly the same, even as demand continues to rise.
It will of course take time to turn investment into delivery of affordable homes and for the benefit to be felt by the private rented market.
Sector reaction
The announcement was enthusiastically welcomed by Kate Henderson, chief executive of the National Housing Federation who described the package as “transformational” and said it will deliver “the right conditions for a decade of renewal and growth”.
Mairi MacRae, director of campaigns and policy at Shelter also called the measures “a watershed moment” in tackling the housing emergency.
However, NRLA chief executive Ben Beadle said the Spending Review “does nothing to tackle the immediate pressures in the private rented market”. In particular, the one million new homes to rent that will be needed by 2031 to meet growing demand, according to Savills.
Stephen Teagle, chief executive of housebuilder Vistry said that the affordable housing investment will “support the efforts of the wider industry to lift the output of new homes of all tenures”. This is by easing viability and accelerating Section 106 processes.
The first towns to benefit from the new Affordable Homes Programme will be Blackpool, Preston, Sheffield and Swindon. Propertymark advised local agents to closely monitor developments in their areas, as the pipeline of new builds will create new opportunities across sales, lettings, management and valuation.
Upholding a commitment to Warm Homes
Generation Rent welcomed the Chancellor’s announcement that the Government will uphold its manifesto commitment to invest £13.2bn in the Warm Homes Plan this parliament.
The Warm Homes Plan will benefit low-income households including private renters who can access funded energy efficiency upgrades through their local council.
This is important since our Voice of the Tenant research reported that 45% of private renters found it difficult to afford their energy bills.
The Warm Homes Plan will help to cut bills by up to £600 for families across the country through energy efficient upgrades such as installing heat pumps and other low-carbon technologies like solar panels and batteries.
However, as noted by the NRLA, the Spending Review does “nothing” to support or encourage landlords to invest in energy efficiency works to their rental properties.
Increased support for struggling families
The Government is also taking steps to bring down cost of living pressures for working families and provide direct assistance to struggling households.
This included a new £1 billion per year Crisis and Resilience Fund that will replace the Household Support Fund from April 2026. This is something that anti-poverty charities like the Trussell Trust have campaigned hard for.
The new fund will incorporate discretionary housing payments, which local councils can pay to people who are struggling to afford their rent or housing costs.
TDS research showed that 55% of private renters are regularly making cutbacks on household essentials to afford their rent. The Trussell Trust said that the Government’s new approach to local crisis support will help to “prevent more sustained hardship”.
The Spending Review also included the expansion of Free School Meals in England to all families on Universal Credit and £100m for early interventions to prevent homelessness.
Dark cloud of tax rises looms
Amid the good news, the Resolution Foundation noted a “dark cloud” hanging over the Spending Review, which was the fiscal reality due to hit at the Autumn 2025 Budget. This is due to a worsening economic outlook and extra spending pressures.
The independent think tank warned that the Chanceller may need to follow up this Spending Review with tax rises or welfare cuts at the Autumn Budget, which is expected in October or November.
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The views expressed in this content are solely those of the author alone and do not necessarily represent the views of TDS, its officers, or employees.
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