National Housing Delivery Fund must have “clear priorities” to unlock homes the country needs, spending watchdog says

Since 2016, the Ministry for Housing, Communities and Local Government (MHCLG) has allocated £10.5 billion to unlock land for an estimated 713,000 homes, and is currently preparing to launch the NHDF in April 2026.

However, a new report from the NAO has warned that in order to deliver value for money, the ministry will need to “swiftly” build on the work it has started to set up the new fund, so it is ready to deliver the homes the country needs.

The Government has set a milestone to deliver 1.5 million new homes over this Parliament to July 2029. This will require building more than 300,000 homes per annum on average.

The Government has acknowledged that a chronic undersupply of land underpins the housing crisis.

The Ministry aims to boost the supply of land for housing development and increase the supply of housing via several ‘unlocking land’ programmes. These include providing grant funding, recoverable loans, acquiring land and providing capacity support.

Assessing whether MHCLG’s programmes to increase the supply of suitable land for housing development are effectively supporting the Government’s ambitions to build the right homes in the right places, the NAO noted that:

• Currently 33,300 (5%) of the 713,000 homes expected to be built over the next decades have been built on land the ministry helped unlock – although MHCLG and Homes England do not currently track the number of homes ultimately built on all the land they open up;
• MHCLG has committed £21bn to the NHDF, which will combine and continue the funding and work of their previous programmes for unlocking land. MHCLG expects the scope of the NHDF to be broader than unlocking land programmes alone;
• MHCLG plans to launch the NHDF to provide a single gateway to the full range of the ministry’s financial support for unlocking land and set up a housing bank created as a subsidiary of Homes England;
• MHCLG-funded work has completed on just over 140 out of 768 of its unlocking land projects, with remaining projects likely to continue until 2034.

For the Fund to be successful and deliver value for money, the NAO report recommends the Government build on the work it has started to:

• “Set out clear expected impacts, agreeing with its delivery partners performance measurement of site progress and the build‑out of unlocked land, using proxy data where needed.
• Establish long‑term evaluation and monitoring to generate timely evidence from both legacy programmes and early NHDF activity, improving understanding of what interventions are likely to succeed.
• Clarify funding priorities for the NHDF and engage proactively with the evolving local government landscape, being transparent about which areas are prioritised and what support exists for non‑priority places.
• Adopt and share a clear risk appetite and management approach cross MHCLG, Homes England and delivery partners to support consistent, deliberate decision‑making across the NHDF portfolio.”

Gareth Davies, head of the NAO said: “The success of the new National Housing Delivery Fund will depend on government setting clear ambitions and priorities for investment alongside its approach to risk management, so that public spending genuinely helps unlock the homes the country needs.”

Responding to the report, Cllr Tom Hunt, Chair of the LGA’s Inclusive Growth Committee, said: “Our communities desperately need new homes, and programmes within the National Housing Delivery Fund will help deliver the land and homes needed.

“To truly maximise the number of new homes brought forward through the National Housing Delivery Fund, councils should be given access to the £2.5 billion in low-cost loans made available in the National Housing Bank.

"Local government looks forward to working with central government and other key delivery partners – councils are highly adept at delivering homes on small sites, so supporting them to deliver, for instance through continued Brownfield Land Release Funding (BLRF) for unviable sites, accessible to all councils, would deliver more homes at pace.”

Lottie Winson