Will new legislation and an ambitious social housebuilding programme end homelessness?
Nobody seems to disagree that Wales is in a housing crisis, which is making itself felt in rising rents, growing waiting lists for social housing and, most acutely, in high levels of homelessness.
Numbers in temporary accommodation have remained stubborn over the last Senedd term, and were at more than 10,600 people – including nearly 2,300 children – in January 2026.
Living for months in temporary accommodation is hard for anyone but especially hard for children. And the amount of money local authorities are spending on providing this accommodation keeps going up, topping £100m last year.
Homelessness has been high on the political agenda since before the COVID-19 pandemic. Partly fuelled by the success of efforts to house homeless people during the pandemic, the rhetoric has shifted from “managing” to “ending” homelessness.
In practice this means making it rare, brief, and unrepeated. A new piece of legislation, the Homelessness and Social Housing Allocation (Wales) Act 2026, underpins this aim.
Passed shortly before the end of the Sixth Senedd, the Act commits local authorities and a range of other public bodies to scaling up homelessness interventions over the course of the Seventh Senedd.
There have also been efforts to increase social and affordable housing supply, including around £2bn of capital investment over the last Senedd term, and an ongoing programme of work to implement recommendations to unblock housing delivery.
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What is homelessness? Homelessness is a much wider phenomenon than rough sleeping, its Most visible face. Its legal definition includes:
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What the new Act means
A major part of the previous Welsh Government’s plan to end homelessness is a new approach called “rapid rehousing”.
Rapid rehousing means moving people through the homelessness system as quickly as possible into settled homes so they spend a minimum amount of time, if any, in temporary accommodation.
Local authorities have produced rapid rehousing transition plans, but despite having successfully moved 9,096 people from temporary accommodation into settled homes during 2025, their efforts have only made a modest dent in overall numbers due to the sheer scale of demand.
Figure 1: Total number of homeless people temporarily accommodated at end of month, January 2024 to December 2025
Source: Welsh Government (StatsWales), Homeless individuals temporarily accommodated at the end of the period by local authority and accommodation type
This is where the new Act seeks to make a difference. Professor Suzanne Fitzpatrick chaired the expert panel that advised the Welsh Government on what the new legislation should look like. She said it’s designed to “increase the flow of people out of the system into suitable accommodation” while also preventing more people becoming homeless in the first place.
It aims to do this in a number of ways, including by:
- increasing early prevention of homelessness, up to six months before an applicant loses their home;
- ending the priority need and intentionality tests;
- placing “ask and act” duties on public bodies including social services, local health boards, prisons and JobCentre Plus; and
- requiring housing associations to cooperate with local authorities, by providing homes to households that the local authority puts forward.
In February 2026, the Senedd voted unanimously to pass the Bill into law. But while the Act is hailed as “life-changing” by the charity Crisis, it’s been less warmly received by local authorities. Many have raised fears similar to those expressed by Cardiff Council, that the legislation will only “encourage more people into a system that can’t cope already”.
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What’s driving homelessness? A combination of factors affects homelessness risk, some personal, some external. Being in poverty is a risk factor, and evidence suggests that housing market trends have a direct impact. The most common personal reasons why households in Wales became homeless in 2024-25 were:
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Increasing supply
Solving homelessness isn’t just about housing. For example, tenancy support services are essential for some people who need help to maintain a stable housing situation, which will in turn make it easier to access other services such as healthcare.
But there’s a consensus among academics, and among stakeholders who’ve shaped the Welsh Government’s thinking, that an adequate supply of affordable housing is an indispensable part of any effort to end homelessness.
The previous Welsh Government made supply a key part of its plan to end homelessness, and set a target of building 20,000 new social homes during the Sixth Senedd term. After Audit Wales found in 2024 that delivery had been “slow and more expensive than initially expected”, the Welsh Government convened an Affordable Homes Taskforce to explore options to unblock existing developments and streamline delivery in future.
Although the 20,000 target wasn’t met, Audit Wales noted earlier this year that the Welsh Government and the wider housing sector had made “significant progress”. More than 3,600 additional affordable homes were delivered in 2024-25, the highest since 2007 when records began.
Despite this, it’s unlikely that the current level of delivery is enough to meet demand. The Welsh Government estimates there are 9,400 households currently in need of affordable housing (though this is likely to be an undercount). This is in addition to newly arising need, which is estimated at between 2,700 and 3,300 affordable homes per year, up to 2030.
A Senedd Committee concluded in March 2026 that the delivery of social housing “remains in crisis”. It expressed concern about the sustainability of the development pipeline going into the Seventh Senedd, and reiterated its call for the Welsh Government to aim for social housing to comprise a “critical mass” of at least 20% of the housing stock.
The Committee advocated for stronger leadership across government departments, the establishment of a National Development Corporation to provide long-term continuity, and the development of a workforce strategy for construction.
Upfront costs, longer-term gains
The timeline for implementation of the Homelessness and Social Housing Allocation (Wales) Act 2026 will be phased over the Seventh Senedd and beyond.
Although a formal timeline hasn’t yet been set out, the previous Welsh Government assumed there would be a ten-year implementation period with the prevention aspects coming online first, and the priority need and intentionality tests being removed later on.
It estimated the Act will cost £395m over ten years to 2035-36, but that it will save money long-term, returning £481m of financial benefits over the same period.
What’s not included in these estimates, though, is the money needed to increase social housing supply. Although there’s good evidence that investment in housing supply returns net benefits to the public purse, a major challenge for the next Government will be funding the upfront costs to realise those longer-term gains.
Article by Dr Jennie Bibbings and Gwennan Hardy, Senedd Research, Welsh Parliament
