Extra funding for new social housing and housing support feature in the Welsh Government’s Draft Budget for 2025/26.
Finance secretary Mark Drakeford revealed details what he said would be ‘a good Budget for Wales’ on Tuesday.
Alongside boosts for health and social care, transport and education, he announced £81 million more in capital funding to build more homes for social rent.
Budget documents confirm this will be for the Social Housing Grant and Transitional Accommodation Capital Programmes ‘which will deliver more homes for social rent supporting our work to end homelessness and ensure everyone in Wales has a decent, secure place to call home’.
In addition, there is a further £26.25m of FT Capital to continue to support loans to Registered Social Landlords (RSL) and a further £5.5m of capital funding in the Independent Living Programme which supports housing adaptations.
There is also an extra £21 million for Housing Support Grant, with total housing funding in the Budget including:
- £437.25 million in 2025/26 for Social Housing Grant
- An additional £13.75 million for TACP
- £219.5 million for homelessness support and prevention
- £3.5 million for leasing scheme Wales
- £95 million for decarbonising our existing homes
- £127 million capital investment in building safety
- £25 million for adaptions to homes
- An additional £57 million for Help to Buy
- £37.5 million for warm homes
- £40.1 million for financial inclusion.
On Housing Support Grant, Cymorth Cymru said that last year’s £13 million uplift has been baselined, and a further increase of £21 million has been awarded for 2025/26, which means HSG should total £203 million next year.
Stuart Ropke, Community Housing Cymru chief executive, said: ‘To steer Wales out of the housing and cost of living crises, we need a dual focus on building the affordable homes so urgently needed and preventing more people from reaching crisis. Today’s draft budget is an important step forward on both fronts.
‘The additional £21m allocated to the Housing Support Grant – the primary mechanism for preventing homelessness and supporting independent living – means that the vital services funded by it can continue their life-changing work for another year. Support providers will be better placed to continue to run high-quality services, and pay staff fairly for the important work they do.
‘As housing associations build approx. 70 per cent of social homes in Wales, the extra £81m capital funding allows us to continue to make progress at pace on building the new homes so urgently needed.
‘There is much more to do to address the full scale of the housing crisis in Wales, but today’s draft budget provides much-needed certainty that will help us make progress together at pace.’
Matt Dicks, national director of Chartered Institute of Housing Cymru, welcomed the extra investment but said the 20,000 social homes target was still at risk.
He said: ‘We welcome the additional £81 million to help deliver more homes at social rent in Wales. This ongoing commitment to delivering new homes is vital so that we can tackle the ongoing housing emergency. Despite this welcomed increase, it falls well short of the additional £580 – £740 million that a recent report by Audit Wales said would be needed to reach the 20,000 target by March 2026.
Cymorth Cymru director Katie Dalton said: ‘We are extremely pleased the Welsh Government has responded to our evidence about the significant pressures facing the homelessness sector, and has increased the Housing Support Grant by £21 million for 2025/26.
‘The commitment to a funding increase at this stage in the budget process is very welcome, and will enable local authorities and support providers to plan for next year. However, any further increases to bolster homelessness services in the final budget would be warmly received.
‘We are very clear that the £21 million needs to build on last year’s efforts to improve frontline worker pay, and should be utilised to further increase the wages of people who do extraordinarily complex, challenging and critical work to support people experiencing or at risk of homelessness.
‘It is also essential that the UK Government provides additional funding to ensure homelessness services do not collapse from the increase in employer NI contributions. Otherwise, the positive steps to taken by the Welsh Government to increase the HSG budget will be consumed by these costs.’
The Draft Budget will be scrutinised by Members of the Senedd before a final vote in March 2025.