The UK Government’s 2025 Spending Review has delivered a welcome degree of long-term certainty for the construction industry, with major announcements around housing, infrastructure, and capital investment. Despite tight fiscal constraints, the Chancellor has committed to substantial public spending across key areas, signalling renewed support for the built environment and its supply chains.
Key to this investment was the launch of a new £39bn Affordable Homes Programme, set to run over 10 years from 2026-27 to 2035-36. The programme promises £4bn per year by 2029-30, as well as a £2.5bn package of low-interest loans for housing associations and £1bn for remediation of social housing stock. A new permanent UK-wide Mortgage Guarantee Scheme, starting in July 2025, is intended to address affordability barriers for first-time buyers, although broader policies to support private market demand remain limited.
The Chancellor has also confirmed a £48bn investment between 2026-27 and 2029-30 to attract additional private investment for new housebuilding that will be managed by Homes England.
On infrastructure, capital investment will rise by an average of 1.8% in real terms each year over the Spending Review period to 2029-30. A new 10-Year Infrastructure Strategy, due later this month, is expected to clarify how institutional reform can support faster rollout.
The timber sector stands to benefit from this long-term commitment to housing delivery. David Hopkins, CEO of Timber Development UK, said: “The £39 billion Affordable Homes Programme is not just a boost for housing, it’s a significant opportunity for the timber industry. Timber is a key material in sustainable construction, and long-term certainty allows our members to plan investment in low-carbon solutions, skills and innovation. These homes must now be built using modern, climate-conscious materials – and timber is ready to lead that transformation.”
The Construction Products Association (CPA) has also welcomed the long-term clarity the review provides, particularly around social housing and transport investment. “This Spending Review marks a much-needed structural uplift in affordable housing and vital infrastructure,” said a CPA spokesperson. “However, without targeted policies to support demand in the private housing market, especially for first-time buyers, overall housebuilding levels may remain constrained in the near term. Delivery must now match these commitments if we’re to see real impact on the ground.”
As the industry awaits the release of the 10-Year Infrastructure Strategy and further detail on delivery mechanisms, the Spending Review has laid down a clear signal of intent: the government sees construction and housing as central pillars of the UK’s economic and environmental future.
