England's need for affordable housing remains substantial, and delivery continues to fall well short of what is required. Although our latest estimate of emerging need is slightly lower than in previous years, this reflects a temporary easing in affordability pressures rather than a lasting reduction in the scale of the challenge.
By the end of 2025, market conditions had eased slightly. Incomes had risen materially in response to higher inflation, while higher interest rates continued to constrain house price growth, particularly in less affordable markets. Together, these factors have produced a modest improvement in affordability.
On that basis, we estimate that around 37% of new homes should currently be delivered as some form of affordable tenure. This equates to approximately 136,200 homes per year, broadly unchanged from recent estimates and reinforcing the need for around two in five new homes to be affordable.
This should be viewed as a baseline measure of emerging annual need. It captures the homes required to support newly forming households and maintain the existing stock of social housing, but excludes backlogs evident in temporary accommodation and households in the private rented sector facing unaffordable housing costs.
Around three quarters of affordable housing need is concentrated in London and the South, reflecting acute affordability pressures and persistently low levels of delivery. However, need remains significant across the Midlands and the North, which together account for over 35,000 homes per year.
Crucially, the modest improvement in affordability reported for 2025 is unlikely to be maintained indefinitely. Our housing market forecasts point to lower interest rates and faster house price growth over the next five years, while income growth moderates. As market conditions normalise, the need for new affordable housing is likely to increase.