How Local Councils Deliver Affordable New Build Homes
While national government schemes like First Homes and Own New Rate tend to dominate the headlines, some of the most impactful affordable housing delivery in the UK happens at the local level. Local authorities — borough councils, city councils, county councils, and unitary authorities — play a central role in planning, funding, and directly building new affordable homes across England, Scotland, Wales, and Northern Ireland. From large-scale council housing programmes in London and Manchester to smaller rural developments in Cornwall and the Scottish Highlands, local authority housing schemes are a vital route to homeownership and affordable renting for hundreds of thousands of UK residents.
Understanding how these local schemes work, who they serve, and how to access them can open doors that many prospective homebuyers and renters never knew existed. In this comprehensive guide, we explore every dimension of local authority new build housing — from the planning mechanisms that create affordable homes to the application processes that connect you with them.
Local authority housing is not a relic of the past. A new wave of council-led housebuilding is underway across the country, driven by acute housing need, planning reform, and dedicated government funding. Whether you are a first-time buyer looking for a shared ownership flat, a family in need of affordable rent, or a key worker seeking priority allocation, there is likely a local scheme relevant to your situation.
The Planning Framework: How Local Authorities Create Affordable Housing
Every local authority in England is required to produce a Local Plan — a statutory document that sets out the council’s strategy for development, including housing targets, land allocations, and policies on affordable housing. The Local Plan is the single most important document determining how many new homes will be built in your area and what proportion of those homes will be affordable.
Local Plans typically include policies requiring developers to deliver a certain percentage of affordable homes on new build sites. In most areas, this falls between 20% and 40%, though some high-demand locations set higher thresholds. London boroughs, for example, often target 35% to 50% affordable housing on major developments, while rural authorities may set lower thresholds to ensure viability.
The two primary mechanisms through which local authorities secure affordable housing from private developers are Section 106 agreements and the Community Infrastructure Levy (CIL). These planning obligations are negotiated during the planning permission process and form legally binding commitments on the developer.
Section 106 Agreements
Section 106 of the Town and Country Planning Act 1990 allows local authorities to negotiate binding agreements with developers as a condition of granting planning permission. These agreements typically require developers to deliver a specified number of affordable homes within their developments, or to make a financial contribution towards off-site affordable housing provision. For a detailed exploration of how these agreements work in practice, see our guide on how Section 106 affordable housing works on new build sites.
Section 106 remains the single largest source of new affordable housing in England. In 2024–25, approximately 26,000 affordable homes were delivered through Section 106 obligations — representing around 44% of all new affordable housing completions. These homes span a range of tenures including social rent, affordable rent, shared ownership, and First Homes.
Community Infrastructure Levy (CIL)
The Community Infrastructure Levy is a charge that local authorities can levy on new developments to fund infrastructure improvements, including affordable housing. CIL rates are set by each local authority and vary significantly. In 2026, rates range from £0 per square metre in some northern authorities to over £400 per square metre in prime London boroughs. While CIL income is primarily directed towards infrastructure like schools, roads, and healthcare facilities, a proportion can be allocated to affordable housing projects.
Not all local authorities have adopted CIL. As of early 2026, approximately 160 of 333 local planning authorities in England have a CIL charging schedule in place. Authorities that have not adopted CIL rely more heavily on Section 106 to secure affordable housing contributions.
Council Housing Programmes: The Return of Direct Delivery
After decades of declining council housebuilding following the Right to Buy era, local authorities are once again stepping into the role of direct housing delivery. Councils across the UK are building new homes on land they own, using a variety of funding mechanisms including the Housing Revenue Account (HRA), Affordable Homes Programme grants from Homes England, and borrowing facilitated by the removal of the HRA borrowing cap in 2018.
This renewed commitment to council housebuilding represents a fundamental shift in housing policy. Between 2010 and 2020, local authorities in England built an average of just 2,300 homes per year. By 2024–25, this figure had risen to approximately 5,800 — still modest compared to the peak years of council building in the 1950s and 1960s, but a significant upward trend that is set to continue through the remainder of the decade.
How Councils Fund New Build Programmes
Local authority housebuilding is funded through several channels. The Housing Revenue Account (HRA) is a ring-fenced account that every stock-holding council maintains, funded by rental income from existing council tenants. Since the removal of the HRA borrowing cap in October 2018, councils have been able to borrow against their HRA without central government limits, unlocking significant new investment capacity. By 2025, councils had collectively borrowed over £4 billion against their HRAs for new housebuilding.
The Affordable Homes Programme (AHP), administered by Homes England, provides grant funding to both local authorities and housing associations. The current programme (2021–2026) has a total budget of £11.5 billion, with a successor programme expected to be announced in 2026 with an even larger allocation. Grant rates for social rent homes can cover up to 40–60% of development costs, making council-led projects financially viable even in areas with high land values.
Some councils have also established local housing companies — wholly owned subsidiaries that operate outside the HRA and can borrow commercially, develop homes for market sale, and reinvest profits into affordable housing. Examples include Brick by Brick (Croydon), Melius Homes (Ashford), and the Barking & Dagenham Reside programme. This model gives councils greater flexibility but also carries commercial risk, as the Croydon experience demonstrated when Brick by Brick ran into financial difficulties.
Regional Examples: How Councils Are Delivering Across the UK
Council-led housebuilding looks very different depending on where you are in the UK. Local housing need, land availability, property values, and political priorities all shape the scale and nature of council housing programmes. Here is a look at some of the most significant programmes across the nation.
London
London faces the most acute housing affordability challenge in the UK, with average house prices exceeding 12 times average earnings. The Greater London Authority (GLA) oversees the strategic housing framework through the London Plan, while individual boroughs deliver their own programmes. Several London boroughs have launched ambitious council housebuilding schemes.
Hackney Council is building over 1,000 new council homes through its direct delivery programme, with developments across the borough including the flagship Frampton Park and Nightingale estates. Southwark Council has one of the most ambitious programmes nationally, targeting 11,000 new council homes by 2043 through its Southwark Council Homes programme. Lambeth Council is delivering approximately 1,000 new homes through estate regeneration and infill development. Camden Council has delivered over 700 new homes through its Community Investment Programme, including the award-winning Agar Grove development.
Manchester and the North West
Manchester City Council has taken a distinctive approach by establishing the Manchester Housing Strategy, which targets delivery of 36,000 new homes by 2032, with a minimum of 6,400 affordable. The council works closely with registered providers and has used its land assets strategically to unlock development. The Northern Gateway scheme alone is expected to deliver 15,000 homes over 20 years, with a significant affordable component.
Salford City Council has been one of the most proactive councils in the north of England, delivering council homes through its Derive programme. The council has committed to building 3,000 affordable homes over the coming decade, funded through a combination of HRA borrowing and Homes England grants. Liverpool City Council has invested in the Foundations programme, targeting 10,000 new homes with 4,000 affordable units across the Liverpool City Region.
Birmingham and the West Midlands
Birmingham City Council, as the largest local authority in Europe by population, faces enormous housing demand with over 20,000 households on its waiting list. The council’s Birmingham Municipal Housing Trust (BMHT) has delivered over 3,500 new homes since its creation in 2009, making it one of the most successful council housebuilding programmes in the country. BMHT builds a mix of homes for council rent and market sale, with profits from open market sales cross-subsidising affordable delivery.
Wolverhampton City Council and Coventry City Council have also established their own new build programmes, typically delivering 50–150 homes per year through a mix of HRA-funded development and partnerships with housing associations. The West Midlands Combined Authority provides additional strategic coordination and funding through its housing and regeneration budget.
Scotland
Scotland’s housing policy operates under a devolved framework, with the Scottish Government setting its own targets and funding programmes. The Affordable Housing Supply Programme (AHSP) is the primary funding mechanism, with a target of delivering 110,000 affordable homes by 2032 — of which at least 70% will be for social rent. This represents one of the most ambitious affordable housing programmes in Europe relative to population size.
Scottish local authorities have significant direct delivery capacity. City of Edinburgh Council is building 20,000 affordable homes through its Edinburgh Home Demonstrator programme. Glasgow City Council has targeted 50,000 new homes across all tenures by 2035, with a strong emphasis on social rent. Highland Council and Aberdeenshire Council face different challenges in rural areas, where they focus on smaller developments tailored to local community needs.
A key difference in Scotland is the abolition of the Right to Buy in 2016, which has protected the existing social housing stock and given councils greater confidence to invest in new builds knowing the homes will remain in the affordable sector permanently.
Wales
The Welsh Government has set a target of delivering 20,000 low-carbon social homes during the current Senedd term (2021–2026). The Social Housing Grant (SHG) is the primary funding mechanism, administered through local authorities and housing associations. In 2024–25, approximately 2,800 social homes were started across Wales.
Cardiff Council has one of the largest programmes, with a target of 4,000 new council homes by 2030. Swansea Council is delivering approximately 1,000 homes through its More Homes programme. In rural Wales, authorities like Gwynedd Council and Ceredigion Council face particular challenges around second homes and holiday lets pricing locals out, and have targeted new affordable builds in communities most affected by these pressures.
Types of Affordable Housing Delivered by Local Authorities
When we talk about “affordable housing” delivered through local authority schemes, it is important to understand that this umbrella term covers several distinct tenure types, each with different rent levels, eligibility criteria, and routes to ownership. Understanding which tenure is right for your situation is essential when navigating local authority housing options.
The mix of tenures delivered on any given development is determined by the local authority’s planning policies, the specific Section 106 agreement or grant funding conditions, and local housing need assessments. In high-demand urban areas, councils increasingly prioritise social rent — the most genuinely affordable tenure — while suburban and commuter areas often see a higher proportion of shared ownership and First Homes.
How to Find Your Local Authority Housing Scheme
Finding and accessing local authority housing schemes can feel daunting, particularly because information is spread across multiple websites, databases, and council departments. Here is a step-by-step guide to identifying what is available in your area.
Step 1: Identify Your Local Authority
If you are not sure which council covers your area, use the GOV.UK “Find your local council” tool at gov.uk/find-local-council. Enter your postcode and you will see which authority is responsible for housing in your area. In two-tier areas (where there is both a district and county council), it is typically the district or borough council that handles housing.
Step 2: Check the Council’s Housing Strategy
Visit your local council’s website and look for their housing strategy, Local Plan, or affordable housing pages. Most councils publish details of their current new build programmes, including development locations, expected completion dates, the number and type of homes being delivered, and the allocation criteria.
Step 3: Register on the Housing Waiting List
For council rent and affordable rent properties, you will need to register on your local authority’s housing waiting list. In England, most councils operate a Choice-Based Lettings (CBL) system, where registered applicants bid on available properties that are advertised weekly or fortnightly. You will be placed in a priority band based on your housing need, with higher bands reflecting greater urgency. Common band categories include emergency housing need, severe overcrowding, medical need, and general housing need.
Step 4: Search Shared Ownership and First Homes Listings
For shared ownership and First Homes properties, the primary search platform in England is Share to Buy (sharetobuy.com), the national portal operated by the Homes Ownership Foundation. This aggregates listings from housing associations and developers across the country. In Scotland, the equivalent is the Scottish Government’s affordable housing portal. In Wales, check Tai Pawb and individual housing association websites.
Step 5: Contact Your Local Housing Association
Housing associations are the largest providers of new affordable homes in the UK. Contact the major associations operating in your area — such as L&Q, Peabody, Clarion, Hyde, and Guinness in London and the South East, or Great Places, Onward, and Together Housing in the North — to ask about upcoming developments and how to register your interest.
Eligibility Criteria for Local Authority Housing Schemes
Eligibility for local authority housing schemes varies depending on the tenure type and the specific council or housing association involved. However, there are common threads across most schemes that you should be aware of before applying.
Council Rent (Social Rent and Affordable Rent)
To qualify for council rent properties, you typically need to demonstrate a local connection to the area — usually defined as having lived, worked, or having close family in the borough for a specified period (commonly two to five years). You must also demonstrate housing need, which is assessed through the council’s allocations policy. Common qualifying criteria include homelessness or threat of homelessness, overcrowding in your current home, medical needs requiring specific housing, living in unsanitary or unsafe conditions, and needing to move for employment or caring responsibilities.
Most councils operate a banding system with four or five priority bands. Emergency cases (such as households fleeing domestic violence or those in properties subject to compulsory purchase) are typically placed in the highest band, while applicants with moderate housing need may be in lower bands. Waiting times vary enormously by area and property size. In high-demand London boroughs, a family needing a three-bedroom home might wait five to ten years in a moderate priority band. In areas with lower demand, waits can be as short as six to twelve months.
Shared Ownership
Shared ownership eligibility in England requires that your household income does not exceed £80,000 per year (£90,000 in London). You must be a first-time buyer, a former homeowner who cannot afford to buy on the open market, or an existing shared ownership holder looking to move. You cannot currently own another property at the time of purchase. Priority is often given to local residents, key workers, and those in housing need. For more on shared ownership schemes and new builds, see our guide to shared ownership versus other ownership schemes.
First Homes
First Homes eligibility requires that you are a first-time buyer with a household income below £80,000 (£90,000 in London). The property must be purchased with a mortgage of at least 50% of the discounted price. Local authorities can apply additional eligibility criteria, including a local connection requirement, a lower income cap, or a higher discount (up to 50%). Priority is given to key workers and military veterans serving or having served in the local area.
Key Worker Priority
Many local authorities give priority allocation to key workers for affordable housing. The definition of key worker varies by council but typically includes NHS staff, teachers, police officers, firefighters, social workers, and military personnel. Some councils extend the definition to include care workers, transport workers, and other essential public service employees. If you are a key worker, check whether your local authority offers specific priority or dedicated key worker housing schemes.
The Application Process: Step by Step
The process for applying to a local authority housing scheme depends on the tenure type. Here is a detailed walkthrough for each route.
Applying for Council Rent
1. Register on the housing waiting list. Contact your local council’s housing department or complete the online application form on their website. You will need to provide identification, proof of address, proof of income, details of your household composition, and information about your current housing situation. The council will assess your application and assign you a priority band.
2. Bid on available properties. Once registered, you can bid on properties advertised through the Choice-Based Lettings system. Properties are typically advertised for a bidding period of one week, during which all eligible registered applicants can express interest. At the close of bidding, the property is offered to the highest-priority applicant.
3. Verification and viewing. If your bid is successful, the council will verify your details and invite you to view the property. You will typically have 24 to 48 hours to accept or decline the offer. Unreasonable refusals may affect your priority status.
4. Tenancy sign-up. If you accept, you will sign a tenancy agreement and receive your keys. Most council tenancies are now offered as secure tenancies (lifetime tenancies) or fixed-term tenancies of five to ten years, depending on the council’s policy.
Applying for Shared Ownership
1. Check your eligibility against the criteria outlined above. Use online affordability calculators to estimate how much you could borrow and what share you could afford to buy.
2. Register on Share to Buy and search for available shared ownership new build homes in your target area. You can also register directly with housing associations that operate in the areas you are interested in.
3. Register your interest with the housing association marketing the development. You will typically be asked to complete a registration form and provide evidence of your income, savings, and housing status.
4. Obtain a mortgage agreement in principle for your share of the property. Not all lenders offer shared ownership mortgages, so work with a broker experienced in this area.
5. Reserve your plot by paying a reservation fee (typically £500). The housing association will then carry out a full eligibility assessment.
6. Complete the purchase through the standard conveyancing process, including searches, mortgage offer, exchange, and completion. The process typically takes 8 to 16 weeks from reservation.
Challenges and Criticisms of Local Authority Housing Schemes
While local authority housing schemes play a vital role in addressing the UK’s housing crisis, they are not without significant challenges and criticisms. Understanding these issues will help you navigate the system with realistic expectations.
Insufficient supply. Despite the recent upturn in council housebuilding, delivery still falls far short of demand. In England alone, an estimated 145,000 new affordable homes are needed each year, but only around 59,000 were completed in 2024–25. This shortfall means long waiting lists, high competition for available homes, and many eligible households being unable to access affordable housing.
Viability assessments. Developers can challenge affordable housing requirements through viability assessments, arguing that delivering the required proportion of affordable homes would make a scheme financially unviable. This process often results in reduced affordable housing delivery on private developments, particularly in areas with high land values. Critics argue that the viability assessment process is opaque and favours developers over communities.
Right to Buy. In England, council tenants retain the Right to Buy their home at a substantial discount (up to £102,400 in London, £77,900 elsewhere in 2025–26). While this has helped many individual families onto the property ladder, it has depleted the social housing stock over four decades and means that every new council home built could eventually be sold off. Scotland abolished the Right to Buy in 2016, and Wales ended it in 2019, but in England it remains a contentious policy.
Quality concerns. Some council-delivered new build homes have faced criticism for build quality, particularly where councils have used less experienced contractors or where tight budgets have led to specification compromises. However, the New Homes Quality Board and increased regulatory oversight are driving quality improvements across the sector. See our snagging inspection guide for advice on checking the quality of any new build home.
Geographic inequality. The resources and capacity available for council housebuilding vary enormously across the country. Wealthy councils in the south of England can leverage high land values and strong rental income to fund ambitious programmes, while less affluent authorities in the north and rural areas may struggle to build at scale. This creates a postcode lottery where the quality and availability of local authority housing depends heavily on where you live.
The Future of Local Authority Housing
Looking ahead to 2026 and beyond, several policy developments are set to shape the future of local authority housing delivery in the UK.
The Planning and Infrastructure Bill, expected to receive Royal Assent in 2026, will reform the planning system with the goal of accelerating housebuilding. Key proposals include mandatory housing targets for local authorities, reforms to the viability assessment process, and a new Infrastructure Levy to replace Section 106 and CIL. The government has stated that the new levy will be designed to capture more land value for affordable housing, though the detail remains subject to consultation.
The next Affordable Homes Programme (successor to the 2021–2026 programme) is expected to be announced later in 2026, with a budget rumoured to exceed £15 billion. The government has signalled a stronger emphasis on social rent, which would mark a shift from recent programmes that prioritised shared ownership and affordable rent.
Right to Buy reform is also under active consideration. Options being discussed include reducing discounts, allowing councils to retain 100% of Right to Buy receipts for replacement homes (currently they keep only a portion), or restricting the Right to Buy on newly built council homes. Any reform would be politically sensitive but could significantly boost the long-term stock of affordable housing.
For individual councils, the trend is clear: local authority housebuilding is growing, investment is increasing, and the policy framework is evolving to support greater delivery. While challenges remain, the outlook for council-led new build housing is more positive than it has been for decades.
If you are interested in other government-backed routes to homeownership, explore our guides on the First Homes scheme, Own New Rate, and alternatives to the Starter Homes Initiative. For advice on assessing the quality of any new build property, see our comprehensive snagging and quality guide.