CIH Cymru response to draft Welsh Budget 2025/26

The Welsh Government has published its draft budget for 2025-26. CIH Cymru welcomes the significant increase of £81 million for the development of social homes in Wales, taking the total monies available as part of the social housing grant to just over £437 million. The funding also provides additional money for the continuation of the Transitional Accommodation Capital Programme (TACP) in 2025/26 - investment which will help mitigate inflationary pressures of the past few years that are now baked into the Welsh economy.

Despite the additional funds allocated to tackling the housing crisis in Wales, CIH Cymru remains concerned that whilst welcome, this increased level of investment is below the £580 million to £740 million that Audit Wales identified as being needed if we are to meet the 2026 target of 20,000 additional low carbon homes at social rent.

The increase in the local government settlement, resulting in an additional £253 million for local government in Wales, is a positive step forward at a time of rising homelessness and increasing use of temporary accommodation. It is hoped that these additional monies will help mitigate council tax rises in 2025/26 at a time when the cost of living crisis is still being felt across Wales.

The final budget has set out the following levels of investment for housing in Wales:

• £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

 Matt Dicks, national director of CIH Cymru commented on the budget:

“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.

“Furthermore, there is no significant increase in the amount allocated to improving and decarbonising our existing social homes. Social landlords in Wales share the ambitions of Welsh Government around building new affordable homes and making existing ones more sustainable, but those twin ambitions have already placed great pressure on existing business models of housing organisations, and whilst there is a significant increase in capital investment in this draft budget, it is unlikely to shift the dial enough to deliver on those ambitions at the pace and scale needed to end our housing emergency.

“We need to make providing everyone in Wales with a safe, sustainable, and affordable home a foundation mission of government if we are to really end our housing and homelessness crisis. Our own Back the Bill campaign research has shown that providing everyone in Wales with a safe, sustainable and affordable place to call home will save the public purse £11.5 billion with an upfront investment of £5 billion. The starting point of that journey is the full incorporation of the Right to Adequate Housing into Welsh law, to ensure that future budgets reflect the scale of the housing emergency we face.”