Wales may be on course to hit its 20,000 social homes target — but a Senedd committee says the system behind it is still “in crisis”.
During a follow-up to its 2024 inquiry on social housing supply, the Local Government and Housing Committee heard that the social housing sector has worked hard to increase delivery towards the Welsh Government’s target of 20,000 new low carbon homes for social rent.
Projections suggest the target will be met by the end of the 2026 calendar year – rather than at the end of the Senedd term as promised – with delivery at its highest level since at least 2007.
But the Committee heard this could be down to an “unsustainable level” of resource input. In the meantime, longer-term systemic reforms identified by the 2024 inquiry and the Affordable Housing Taskforce – a set of reforms commanding widespread support – have been relatively slow to progress.
Audit Wales has warned of the risk of a drop in delivery at the start of the coming Senedd term, highlighting that delivery dropped by 26% at the start of the current term.
The Committee has written a letter to the Cabinet Secretary for Housing and Local Government, Jayne Bryant MS, to ask questions and raise a number of concerns.
Owning the housing crisis
The housing crisis needs to be a shared, cross-cutting priority for the Welsh Government – but conflicting policy agendas are compromising the delivery of social and affordable housing, the Committee heard.
Commonly-cited examples of conflicting policies include:
- the recent Natural Resources Wales guidance restricting housing developments in some areas due to marine nitrate pollution, and
- the long-term target to achieve EPC A across all social housing.
One mechanism for achieving cross-cutting ownership for tackling the housing crisis could be a national development corporation. The Committee has renewed its call for an arm’s-length body for Wales that could take lessons from Homes England and the proposed new housing agency for Scotland.
Although the Welsh Government previously rejected this recommendation, most witnesses argued that a development corporation could increase the Government’s ability to strategically manage land assets, overcome planning blockages, and work beyond the timeframe of individual Senedd terms.
Members also heard that bringing the right to adequate housing into Welsh law would be another way of ensuring that delivering more social housing becomes a shared priority across government departments.
These will be key issues for the next Welsh Government to consider.
Beyond the target
After so much hard work having gone towards trying to achieve the 20,000 target, the prospect of a potential drop in affordable housing delivery at the start of the next Senedd was a concern for Members.
The letter to the Cabinet Secretary has asked for the reasons behind the 26% drop in delivery at the start of the current term, and whether another similar drop is likely this time round.
The Committee has also raised concerns about the recently updated estimates of additional housing need. These estimate a newly arising need of between 7,800 and 9,300 additional homes annually 2025-30, with around 35% of this for affordable housing.
The focus on the broader category of “affordable housing” – as opposed to “social”, which only includes homes let at social rent levels – is a problem for the Committee. They said the estimates are “underpinned by an imperfect methodology” which also excludes categories of housing need such as rough sleeping, hidden homelessness, and people living in unsuitable accommodation:
“We would urge caution that these figures should not be taken as an indicator of how much additional social housing Wales needs.”
More broadly, the Committee continues to advocate that social housing should comprise a “critical mass” of at least 20% of the total housing stock, compared with the current 16%.
The Welsh Government had previously accepted this recommendation in principle, and several witnesses voiced their support including Community Housing Cymru and the Chartered Institute of Housing.
The Committee’s letter has asked the Cabinet Secretary for an update on the Welsh Government’s analysis of what steps will be needed to secure at least a 20% critical mass.
Capturing land value
A consistent theme from the 2024 inquiry and the 2026 follow-up has been the potential for land value capture interventions, to finance and otherwise incentivise social housing supply.
Land value capture describes a set of policies that allow governments to capture increases in land value that are generated by public interventions such as investing in local infrastructure, or redesignating land as suitable for residential development.
The idea is that when a government invests in things like roads, rail, or schools, the value of nearby land tends to rise. Rather than all of that uplift accruing solely to landowners, a proportion can be returned to the public sector to help fund the improvements that created the uplift and support further investment in the public good.
Currently the main way this is done in Wales is by section 106 planning obligations placed on developers. Other ways of capturing land value include taxation and compulsory purchase. The Welsh Government recently announced an upcoming joint consultation with the UK Government, which will gather views on a proposed Vacant Land Tax. The aim would be to influence developer behaviour, ensuring that land earmarked for development is developed.
The Welsh Government previously accepted in principle the Committee’s recommendation to explore how more land value could be captured for the public benefit. The Committee has asked for an update.
And it’s asked for an update on a related recommendation, also accepted in principle, to explore what more could be done to strengthen the arm of local authorities to hold firm when developers try to renegotiate their section 106 agreements to reduce the amount of affordable housing they’ve previously agreed to deliver.
This is needed, said the Committee, to “send a clear message to developers and the land market” that the cost of section 106 contributions should be fully taken into account in the sums that developers pay for land.
Further questions
The Committee has asked for a response by 19 March 2026 to these questions and others, including on:
- Resources for planning services;
- The role of the Development Bank for Wales; and
- Efforts to grow the built environment workforce.
But some questions must for now remain unanswered:
- Whether the 20,000 target will be achieved by December 2026, as predicted;
- Whether the sector is depleted by “unsustainable” recent efforts; and
- Whether there’s likely to be a downturn in delivery for the next Welsh Government to address.
Article by Jennie Bibbings, Senedd Research, Welsh Parliament
