Welsh Government boosts funding for social housing development but leaves decarbonisation funding untouched

Welsh Government’s first supplementary budget for 2026/27 includes an additional £20 million in capital investment to support the delivery of more social homes in Wales.

This welcome investment takes the total level of capital funding for additional social homes to £465.9 million, although – as set out in our housing strategy for Wales – analysis by Alma Economics suggests that around £671 million per annum would be needed for Social Housing Grant, at current grant intervention rates, to get to 20,000 new social homes by the end of this Senedd term.

This additional funding is an important recognition of the urgent need to increase the supply of social homes across Wales. However, it is disappointing that the decarbonisation of existing social homes has received no further investment. As set out in our housing strategy for Wales, and supported by research from the New Economics Foundation, current investment will need to go much further than the £96 million currently allocated if Wales is to meet the scale of the challenge.

Social housing providers in Wales are ready to play their full part in delivering the homes we need to end the housing emergency, while also improving the homes people already live in as we work with Welsh Government towards a net zero Wales. To do this at the pace and scale required, the sector needs sufficient and sustained funding for both new social and affordable homes and the decarbonisation of existing homes. Only then can we ensure people across Wales have access to safe, suitable, sustainable and affordable homes now and for future generations.

CIH Cymru director Matt Dicks said: “Wales is facing a deep and ongoing structural housing emergency – behind these figures are people, families and children who urgently need the security of a safe and affordable home. Currently, 90,000 households, representing 170,000 individuals including 34,000 children, are waiting for a social home. In 2024/25, one in every hundred households became homeless and, in March 2026, 10,509 individuals were living in temporary accommodation while 143 people were sleeping on our streets.

“We warmly welcome the uplift in funding for social housing development, which will support registered social landlords to deliver more of the homes Wales so urgently needs. However, building new homes must go hand in hand with investing in the homes people already live in, ensuring they are affordable, sustainable and fit for the future. That is why it is disappointing that decarbonisation funding has not increased. We urge Welsh Government to provide sufficient funding for both new supply and decarbonisation so that, together, we can deliver safe, sustainable and affordable homes for communities across Wales.”