£39 Billion Opportunity: What the UK’s Social Housing Investment Means for Builders & Developers

Jul 24, 2025

The UK government pledged to invest £39 billion in social housing during the 2025 Spending Review which has caused excitement in the construction and development industry.

With a social housing crisis resulting in property shortages, rising homelessness, and almost uninhabitable properties, this commitment provides the opportunity for builders and developers to help shape the future of affordable housing across the country.

The social housing crisis

Social housing in the UK has been underfunded for many years, with fewer properties and higher demand causing numerous issues. There are over a million households on the waiting list for social housing in the UK, and local authorities are under pressure to meet these needs despite being restricted by tight budgets and strict regulations.

To help tackle this major issue, the government has launched a £39 billion social housing investment programme with a focus on:

• Building new social and affordable homes
• Retrofitting and upgrading existing housing stock
• Supporting local councils, housing associations, and community-led schemes

Key opportunities for builders and developers

There are numerous opportunities to be gained by builders and developers in line with this new government initiative. These include:

1. An increase in contracts

Thousands of new homes will be commissioned through local authorities and housing associations using new frameworks and procurement routes. Developers and construction companies that can offer capacity, compliance, and value for money could benefit from an increase in contracts, particularly outside of London.

2. Retrofitting opportunities

Much of the government’s £39 billion investment has been allocated to modernising existing social housing and make properties energy efficient. This will also help the government to reach their net-zero carbon targets. Potential retrofitting opportunities include:

• Insulation upgrades
• Heat pump installations
• Window and door replacements
• Roof and cladding improvements

This is particularly positive news for contractors with experience in modernising properties, providing eco-friendly energy solutions, or working with sustainable materials.

3. Modern Methods of Construction (MMC)

The social housing sector is particularly interested in off-site and modular construction, as this can speed up delivery and help them to work in an eco-conscious way. Developers who can integrate MMC either in-house or through partnerships will be attractive to social housing clients and those providing the funding.

Procurement and delivery

Accessing this new opportunity means understanding public sector procurement. Many contracts will be awarded through:

• Housing frameworks e.g. Homes England’s Dynamic Purchasing System (DPS)
• Local Authority housing partnerships
• Registered Provider tenders

To compete, builders and developers should:

• Make sure their accreditations and certifications are up to date
• Demonstrate social value contributions e.g. employing local labour or offering apprenticeships
• Highlight how they work in a sustainable way

The government has shared they’ll be focusing on community impact, environmental responsibility, and quality delivery.

Regional focus

This investment is an important part of the government’s Levelling Up initiative. This means that areas which have been underfunded in the past, such as coastal communities, will be prioritised when it comes to social housing funding.

This could mean there will be opportunities for builders and developers to work directly with councils and housing associations, rather than having to compete with national companies.

Long-term benefits for the construction industry

In addition to the contracts and tenders that will be available as part of this initiative, the £39 billion social housing investment may benefit the construction industry in the following ways:

• More consistent workloads
• Increased demand for skilled labour and apprenticeships
• Strengthening of local supply chains

The UK’s £39 billion commitment to social housing will increase the demand for builders and developers that meet the standards the government is looking for. With the right accreditations, partnerships, and supply chain readiness, construction companies of all sizes can benefit from this exciting investment.

As the UK construction sector prepares for a surge in social housing demand, having the right materials partner is key. Here at Strukta our extensive range of construction and building supplies ensure you’re equipped to deliver your projects, whether you’re retrofitting, building new, or adopting MMC.

View our catalogue to discover our extensive product range.