What are the key trends for London’s social housing providers in 2025?

CPI+1%

The government’s plans for a new five-year rent settlement of Consumer Price Index (CPI) plus 1% provides much-needed long-term certainty for social housing providers. It should enable housing associations to make informed decisions regarding investment in new social homes and ensure stability for their financial planning. G15 members are calling for a 10-year rent settlement for councils and housing associations, which it is argued will have greater benefits.

There are also ongoing concerns over affordability for low-income renters due to Local Housing Allowance (LHA), which is to be locked at the current levels until 2026. With rents rising across the private sector, many low-income renters – especially in high-cost areas such as London – are likely to face affordability challenges. As such, a corresponding increase in LHA will be necessary to help make social housing affordable to all.  

Investing in skills

A critical challenge the industry is facing is the shortage of skilled construction workers, which threatens new housing projects. The government has pledged funding for construction apprenticeships, skills academies and other financial incentives to support workforce growth in the housing sector.

Five-thousand more construction apprenticeship places will be made per year as the government works with the Construction Industry Training Board and the National House Building Council.

Addressing planning capacity challenges

The government has committed £46m in additional funding to support the recruitment and training of 300 new graduates and apprentices in planning roles. This is essential for meeting housing targets and addressing capacity issues in local planning authorities. However, attracting and retaining planning talent in the public sector remains a challenge.

Currently, only 16 universities in England and Wales offer planning qualifications, and the profession often suffers from negative press surrounding local planning authorities. Furthermore, salaries in the private sector tend to be more competitive, creating a challenge for attracting and retaining planning talent in the public sector. In the past decade, the number of planning officers in the public sector has fallen by a quarter, while private sector planning teams have seen an 80% increase in staffing levels.

To achieve the goal of delivering 5,000 affordable homes, attracting and retaining skilled planning officers will be crucial.

Regeneration is vital for growth

Regeneration, a key method for increasing affordable housing, is being increasingly recognised. Experts argue that regenerating existing estates and older buildings is a more effective way to meet demand than expanding into surrounding areas.

Several London boroughs are already leading the way, using regeneration to improve housing quality and increase the available stock of affordable homes. This approach delivers benefits on multiple fronts – residents gain modern, energy-efficient homes, while pressure on council waiting lists is eased by increasing the number of homes available. It is great news that an additional year of the UK Shared Prosperity Fund has been confirmed, serving as a vital boost to local growth.

The government’s commitment to supporting social housing providers in 2025 will drive many trends we’re seeing in the sector. The Spring Spending Review this year will be pivotal in determining how these initiatives are implemented.

Shazia Bashir, partner, TLT London housing and regeneration team