The top-up, reported by the BBC and City AM, would lift the total value of the ten-year programme to more than £40bn. The previous commitment stood at £39bn. Of the total, £9.5bn has already been allocated.

The announcement is expected to feature in John Healey’s first major fiscal event as chancellor, due on Wednesday.

The extra cash follows strong demand for the programme, which is split between London and the rest of England. Bidding rounds in the spring and summer were heavily oversubscribed.

In August, Homes England allocated £9.5bn, around a quarter of the total fund, to deliver 73,000 homes outside London. Some reports put the figure at £10bn handed to 33 strategic partners.

The Greater London Authority, which administers the programme in the capital, has not yet publicly announced how it has distributed the first £6bn of its £15bn share. It has reportedly informed bidders of its decisions.

According to the BBC, the Budget will also bring greater powers and funding for mayors and regional leaders across England. The government will reportedly work with mayors from 2028 to design a new £1.5bn facility allowing councils and regional bodies to borrow at preferential rates. The money could be used for new homes or transport infrastructure, among other projects.

A Treasury announcement over the weekend said the government would also help more councils borrow for housebuilding by extending preferential borrowing rates.

Ministers have framed the moves as part of the biggest council house building programme since the post-war period. Since the 1980s, more than two million council homes have been sold through Right to Buy, with successive governments failing to replace them. The Prime Minister has committed to restoring public housing stock, including by exempting new builds from Right to Buy for 35 years.

The Chartered Institute of Housing (CIH) welcomed the reports. Rachael Williamson, its director of policy, communications and external affairs, described the funding as a “significant and timely investment in tackling housing need and supporting communities across the country”.

She said the commitment recognised the role affordable homes play in reducing homelessness, addressing waiting lists and supporting economic growth.

However, the CIH urged the government to make the money available quickly. “To maximise its impact, the additional funding should be made available from 2027-28,” Williamson said, arguing this would let providers accelerate delivery, maintain development pipelines and get new homes to communities sooner.

The institute also stressed that the devolution package was “equally important” to the SAHP uplift. Delivering the homes the country needs, Williamson said, would require both investment and local leadership, with decisions shaped by those who best understand local needs.

£432m to end rough sleeping

Separately, the Budget will include a further £432m to tackle rough sleeping. The funding will extend support beyond March 2027 to the end of this Parliament, bringing total investment behind the Prime Minister’s commitment to £874m.

The Prime Minister has said he is confident that everyone sleeping rough will be offered a route off the street, or to wider support, before Christmas.

The CIH welcomed the money but called for wider action on the root causes of homelessness. Stephanie Morphew, its policy lead on homelessness, said ending rough sleeping required “both immediate support for those in crisis and action to address the underlying causes”.

She urged ministers to reinstate the link between Local Housing Allowance rates and market rents, which she said would help people keep their homes and ease pressure on homelessness services. She also called for strategic and local authorities to be empowered to direct funding to the housing providers and charities best placed to deliver lasting results.