As part of the Plan for Change initiative, this investment aims to invest in social housing and unlock development in areas like Liverpool and Manchester.

According to the announcement, all projects funded through this £2bn will need to start by March 2027, and finish by June 2029.

The funding will be made available to providers on the same terms as the Affordable Homes Programme for 2021-26 and will act as a bridge to the future grant programme to be announced at spending review.

The government also plans to train 60,000 new construction workers, tackling skills shortages and getting more young people into construction jobs.

The £2bn investment boost comes as a down payment from the Treasury ahead of more long-term investment in social and affordable housing planned later this year, which will provide additional funding for 2026-27.

The government is encouraging providers to come forwards as soon as possible with projects and bids to ramp up the delivery of new housing supply.

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Angela Rayner, deputy prime minister and housing secretary, said: “This investment will help us to build thousands more affordable homes to buy and rent and get working people and families into secure homes and onto the housing ladder.

“This is just the latest in delivering our Plan for Change mission to build 1.5 million homes, and the biggest increase in social and affordable housing in a generation.”

Chancellor of the exchequer, Rachel Reeves commented: “We are fixing the housing crisis in this country with the biggest boost in social and affordable housebuilding in a generation.

“At the conclusion of the current Spending Review process on 11 June 2025, the government will announce further long-term investment into the sector in England, delivering the biggest boost to social and affordable housing in a generation.”

Kate Henderson, chief executive at the National Housing Federation, added: “Social housing is the only secure and affordable housing for families on low incomes, and the dire shortage has led to rocketing rates of poverty, overcrowding and homelessness.

“Investment in social housing is not only key to tackling the housing crisis, but is also excellent value for money, reducing government spending on benefits, health, and homelessness as well as boosting growth.

“Housing associations are ready to work with the government to deliver a generation of new social homes.”