Placemaking and the Spending Review

The Government’s 2025 Spending Review (SR25) marks a significant and encouraging boost for the placemaking sector, introducing an ambitious programme to support delivery and investment. The Government seems to be putting its money where its mouth is.

Central to the announcement is a £39 billion Affordable Homes Programme, with funding committed over 10 years. This long-term funding pledge offers some of the certainty developers, housing associations and investors have been calling for to enable more strategic financial planning and phased development at scale.

Building on this, the creation of the National Housing Bank, a publicly owned subsidiary of Homes England backed by £16 billion of new financial capacity, is likely to be seen as particularly reassuring. The Bank’s ability to issue government guarantees, provide infrastructure lending and offer tailored financing solutions is designed to unlock up to £53 billion in private sector investment.

A blend of public capital and private finance is sorely needed to fill key market gaps, including infrastructure funding and SME developer support. For investors and developers, the Bank’s package offers the opportunity to access flexible, long-term finance structured to help de-risk complex and large-scale projects. The Bank’s financial backing is expected to catalyse institutional investment flows into mixed-use and affordable housing schemes, increasing the sector’s appeal to pension funds and other long-term investors.

The emphasis on infrastructure funding is particularly welcome. Infrastructure is a major barrier to placemaking and housing delivery, with upfront costs often deterring private investment.

While operational details and allocation criteria will follow, Homes England’s enhanced autonomy will hopefully bring a more agile approach to deploying capital, balancing necessary public finance controls with the urgency of market demand. The support for SME developers recognises their critical role in delivering housing at a local level and diversifying the supply chain.

Planning reform remains an essential complement to this funding framework, however, to ensure that this much-needed funding is enabled to work. Sustained capital, infrastructure investment and planning improvements are needed to come together to resolve the long-standing delivery bottlenecks.

SR25 and the National Housing Bank offer a great opportunity to spur housing finance and support the delivery of large-scale placemaking projects. What we need to see now is effective implementation and delivery from the Government, which now needs to put its mouth where its money is…

Many thanks to trainee Madeleine Ross for their help in writing this article.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, June 2025