Report

Housing Outlook Q3 2026

This report from UK think tank the Resolution Foundation explores the housing outlook in Q3 of 2026.

Britain’s new Prime Minister has put “council housing” at the heart of his programme for government. The case for building more affordable homes is strong: near-record numbers of families in England are living in temporary accommodation today, and 1.3 million households are on local authority housing waiting lists. But whether Andy Burnham means building more homes for social rent, councils building more themselves or both, there is a price tag attached.

As social rent homes need more upfront subsidy than other ‘affordable’ tenures, building more social rent units means spending more or delivering less. We estimate if all of the Government’s £39 billion grant programme was ring-fenced for social rent, just under 25,000 affordable homes annually could be delivered compared to the current target of 30,000. But other levers could be pulled to offset that loss. At least while demand is weak, private developer contributions via Section 106 could be tilted towards ‘affordable rent’ (which requires less subsidy), adding around 2,000 additional homes a year. Likewise, the new National Housing Bank’s £2.5 billion low-interest loan facility for housing associations could deliver another 4,700 affordable homes a year.

Carefully pulled, these three levers would allow the new Prime Minister to boost the number of social rent homes built and increase the total number of affordable homes over the rest of the Parliament. But this is still a far cry from the “biggest council house building programme since the post-war period” that Burnham has promised. That would require significantly more money, especially if local authorities that currently build just 2,000 homes a year are to be at the helm.

And with the best will in the world, new homes still take years to build. But those at the sharp end of our housing crisis cannot afford to wait for the diggers, so as the gap between housing support in Universal Credit and actual housing costs heads towards a record level, the Government must re-peg housing support for lower-income private renters to actual rents come the Budget.