Government paves the way for local people to build more homes
Source: gov.uk (2025-03-25)

The government has announced a £20 million investment to support the delivery of community-led housing.

- Thousands more homes to be unlocked through government investment in community-led housing
- Local communities to get more power to locate, design and build high quality homes with £20 million package
- All part of the government’s Plan for Change – delivering 1.5 million homes and the biggest boost in affordable housing in a generation
Thousands of new high-quality homes, including social and affordable, will be designed and built by local people for local people, thanks to new government investment to accelerate the delivery of community-led housing.

A £20 million package for community groups, such as community land trusts and housing co-operatives, has been confirmed by the Housing Minister that will directly support the construction of more than 2,500 new homes over the next decade. These housebuilding projects will be led by communities to specifically address local needs in their area.

Community-led housing is about placing power into the hands of local people who will take the lead in the design and location of new homes, with community groups being able to access land and receive planning permission where speculative developments cannot.

This is the first time the government has supported this approach to finance housebuilding at this scale and will help overcome critical barriers to community-led housing delivery, such as community groups accessing the capital needed for housebuilding.

The new investment announced today forms part of the government’s Plan for Change and commitment to build 1.5 million new homes as well as helping more working people and families achieve the dream of homeownership, boosting growth and raising living standards across the country.

Housing and Planning Minister, Matthew Pennycook said:

“Community-led housing not only delivers social and affordable homes for local people, it also gives local communities a greater say on where new homes are built and how they are designed.

“This investment will help community-based organisations overcome barriers to housing delivery and will support the growth of the community-led housing sector.

“Through our Plan for Change we are boosting housing supply and reforming the housing system, delivering on our commitment to the biggest increase in social and affordable housebuilding in a generation.”

The community-led housing sector is grossly under-developed in the UK compared to other countries in Europe, resulting in a significant loss of potential social and affordable housing as well as depriving communities of the high-quality housing they want.

Recognising the value of community-led housing, the government is investing the £20 million in a social finance fund, which will be led by Resonance who have strong experience in working with community organisations to support the delivery of these homes.

This investment will be used to attract up to £30 million in match-funding from the private sector as well as local authorities and combined mayoral authorities.

Head of Developing Communities at Resonance, Jon Rolls said:

“This is a landmark moment for our fund and for the community-led housing movement. MHCLG’s investment will act as a vital catalyst, unlocking more support for communities determined to shape their own futures. It’s simple – when communities are in the driving seat, brilliant things happen.”

Chief Executive at the Community Land Trust Network, Tom Chance said:

“This investment will be welcomed by hundreds of communities working to build thousands of much-needed homes, from tourist hotspots where local are priced out to city neighbourhoods blighted by a lack of investment. Community-led development offers local people a tool to be builders rather than blockers.”

The new funding follows the government’s overhaul of the planning system with a new growth-focused National Planning Policy Framework, which has imposed new mandatory housebuilding targets for councils so they can play their part to meet local housing need.

The updated planning framework has also strengthened support for community-led housing, which includes broadening the definition of organisations able to deliver this housing and making changes to the size limit on community-led sites to allow more homes to be built.

Government investment in housing has increased to £5 billion for this year, including a top-up of £800 million being injected into the existing Affordable Homes Programme to help deliver tens of thousands of new social and affordable homes across the country.

An extra £2 billion injection of new grant funding to build up to 18,000 new social and affordable homes has also been confirmed today, helping to deliver the biggest boost to social and affordable housing in a generation while making sure those homes go to the people who need them most.

As part of its Long-Term Housing Strategy, which is due to be published later this year, the government is considering further measures to help grow the community-led housing sector.

Further information

Community-led housing is developed by community-based organisations, such as community land trusts and housing co-operatives, to deliver much-needed affordable housing in their area.

The government has invested £20 million in the Resonance Community Developers social finance fund for a 10-year period. Resonance Limited is an established social finance company with experience in supporting the delivery of community-led housing.

Resonance is expected to begin investing directly into local housebuilding schemes across England over the next few weeks.

Community-led organisations and housebuilders across the country have already benefitted from previous funding. This includes Chagford Community Land Trust delivering nearly 30 affordable homes in Devon, YorSpace building 19 affordable homes and a common house in York, and Cohousing in Cambridge providing 42 apartments and town houses with community facilities and a sociable shared garden.