Spending Review spotlight: Could ‘mixed methods’ help to unlock 1.5 million homes?

This year’s Spending Review was billed as ‘make or break’ for the government’s 1.5 million housing target. 

With Homes England reporting the completion of just 36,757 homes in 2024-25, it felt like a huge stretch for Labour to deliver ‘the biggest boost to social and affordable housing in a generation’ by 2029.

That’s why the Chancellor’s near doubling of the Affordable Homes Programme to £39bn and a 10-year rent settlement at CPI + 1% from 2026 is transformative for our sector. Council and housing association housebuilding has been prioritised, providing the long-term confidence and certainty needed for social landlords to plan, invest and build.

Alongside this, the announcement of nearly £1bn to expand the supply of local authority temporary accommodation is welcome news, showing the government is serious about ending the housing crisis. 

As housing providers digest this ‘historic’ budget settlement for house building, attention will soon focus on the how. Around 300,000 social homes must be built every year to stay on track with government targets – but what’s the key to achieving this significant uplift by the end of this parliament?

I’ve worked in social housing construction for two decades, most recently in offsite and modern methods of construction. Although the notion of large factories delivering 3D boxes has evolved, there is a new interpretation of modern methods of construction (MMC) that I believe can support the government to reach its ambitious construction goals.

Over the past 12 months, I’ve witnessed MMC transforming into ‘mixed methods of construction’. Gone are the days of manufacturer-centred, product-focused projects. Instead, it’s all about the best construction approach for a specific site, depending on typography, planning, costs and more. 

The solution is often a blend of traditional and offsite, with construction firms taking the principal contractor role and bringing in manufacturers to supply their systems. 

I’m seeing this integrated approach being used more frequently by housing associations’ own in-house build teams. It’s also commonly employed for infill sites, and another growing area of use is temporary accommodation, with rapid deployment of MMC modules enabling councils to move people out of costly hotels and into good quality, managed housing faster. This is particularly relevant following the Chancellor’s announcement that by 2029, the government will no longer use hotels to house asylum seekers. 

This all links back to the skills gap that many social landlords have struggled with for years. Despite the government announcing training for 60,000 apprentices, there is still a huge hole in the building workforce. Last year it was estimated that over 250,000 extra construction workers would be needed by 2028 to meet demand. If social landlords are going to realise the government’s ambitious building targets, more efficient and streamlined ways of constructing homes are desperately needed.

Combining traditional techniques with large, manufactured components is one way to deliver this efficiency. The number of workers required on site reduces and a new generation of construction professionals are attracted to the warm, dry, tech-focused side of factory construction. Build times speed up, quality control improves, sustainability can be baked in, and waste decreases. 

This ability to build more efficiently is more important than ever as hikes in National Insurance Contributions and the minimum wage begin to bite, along with more stringent rules on building safety and energy efficiency.

Indeed, many volume house builders are also turning to an integrated construction approach, and in Scotland, it’s been standard to use large, manufactured components (i.e. timber frames) for decades.

The social housing sector had high hopes from this year’s Spending Review and the outcome means it will drive new build progress for years to come. Many in the sector see the Chancellor’s ambitious Affordable Housing Programme, along with the 10-year rent settlement, as a turning point for social housing renewal. The question, now, is how social landlords engage the construction market and grow skills, turning this significant spending pledge into homes on the ground.

What else did Rachel Reeves announce in the Spending Review?

• Building Safety: The government’s £1bn remediation funding pot is now accessible to social landlords as well as private building owners, allowing councils and housing associations to speed up the remediation of unsafe stock. 
• Energy Efficiency: £13.2bn of funding will expand the Warm Homes Plan, enabling it to ‘cut bills, tackle fuel poverty and accelerate to net zero’ over the next five years. More detail will be confirmed by the Autumn.
• Temporary Accommodation: £950m has been allocated to the fourth round of the Local Authority Housing Fund (LAHF), helping councils to boost the supply of good quality temporary housing. This will enable the government to end the use of ‘costly bed and breakfasts and hotels’ to house asylum seekers by 2029. 
• Rent: A 10-year policy has set rents at Consumer Price Index + 1% from 2026, protecting tenants and giving social landlords certainty and confidence to borrow and invest in new and existing homes. Alongside this, a consultation on the reintroduction of rent convergence has launched. This policy, which was scrapped ten years ago, takes into account local incomes and house prices to create a national rent formula, ensuring residents in similar homes pay a similar rent.
• Planning: The Chancellor announced, ‘The biggest overhaul of our planning system in a generation’, with measures to remove barriers to growth in housing, infrastructure, and regional development. This links directly to the government’s 1.5m housing target, speeding up planning for new build schemes and addressing current bottlenecks.

By Tony Woods, technical manager – construction & sustainability, PfH