Chancellor Rachel Reeves has used the Spring Statement as an opportunity to make a clear distinction between the Labour government’s attitude toward the property market and that of the previous Conservative administration. The Chancellor used the update to highlight the raft of economy boosting measures introduced by the government in recent weeks after the Office of Budget Responsibility revised growth forecasts.
Planning reform, including the reclassification of green belt to grey belt land to unlock land use and the updated National Property Planning Framework (NPPF), £2bn investment in affordable and social housing, and the introduction of the Planning and Infrastructure bill were all namechecked in the 30 minute statement during which the Chancellor repeatedly asserted the mantra ‘promised by this Labour government, delivered by this Labour government and opposed by the parties opposite’ as she sought to soften the blow of announcing growth forecasts from the OBR have been halved; from 2% to 1%.
Thereafter Reeves asserted the investment in activity would yield a permanent increase in GDP with the OBR forecasting 1.9% in 2026, up from 1.8%; up 0.3% in 2027 from 1.5% to 1.8%; 1.5% to 1.7% in 2028; and 1.6% to 1.8% in 2029.
On the same day inflation figures were published, showing a slight fall to 2.8% from 3%, albeit still above the Bank of England’s 2% target, the OBR predict inflation will continue to rise to an average of 3.2% next year, before the rate starts to fall. It is expected to reach the Bank of England’s 2% target from 2027 onwards.
Describing the planning system as ‘far too slow’ Reeves said the OBR had concluded that ‘our reforms will lead to housebuilding reaching a 40 year high’ to over 300,000 home per year and 1.3m over the next five years. Putting the party ‘within touching distance’ of the 1.5m set out in their manifesto. In the statement Reeves said ‘there are no quick fixes, but we have taken the right choices’ pointing to two interest rate cuts since the general election as evidence of the progress the government is making.
Despite calls for an extension, conveyancers will no doubt be relieved there was no further reprieve for movers likely to miss the SDLT deadline on Monday 31st March. Elsewhere there was disappointment with Rightmove’s property expert Colleen Babcock saying more could have been done to help the estimated 70,000 movers projected to miss the deadline, with a third of those being first time buyers.
“Given the current challenges faced by first-time buyers, our data shows that a typical first-time buyer in Britain now faces average monthly mortgage payments of £940, a 59% increase compared with £590 per month five years ago. Over that same period rents have increased by 40% across Great Britain. So, while we welcome the government’s focus and investment to help build more affordable homes, we’re keen to hear more about how this, or other incentives, can help more first-time buyers.”
The statement held no further surprises with the property sector broadly welcoming the focus on housebuilding and delivering on the new build targets. Ben Thompson, Deputy CEO, Mortgage Advice Bureau, on how the Spring Statement will impact prospective and current homeowners:
“While the Chancellor has reinforced the government’s commitment to get Britain building again, and declared that households will be £500+ a year better off on average, there was little else for aspiring first time buyers or home movers to get excited about in today’s Spring Statement. The focus now must shift towards more direction and innovation from regulators and lenders to support a larger pool of borrowers and open up the housing market. Responsible lending proposals to consider relaxing affordability criteria and LTI caps, and the development of mortgage products that focus on rental track records are just some of the options that would be welcomed with open arms, making homeownership more accessible and affordable.
“We’ve also long campaigned that those who buy or retrofit their homes to a higher EPC rating should be rewarded. This is alongside pushing for more concrete investment to encourage retrofitting 29 million of UK homes. We believe this can be achieved through offering a Stamp Duty refund to those who buy and then retrofit to an EPC rating of C or above, and we hope this will be reconsidered by the government in the future.”
RICS CEO, Justin Young, said:
“We are glad the Chancellor has announced a number of measures RICS have been advocating for to support housebuilding, skills development and businesses. The announcement by the government of an additional £2 billion investment to build 18,000 new social homes is an enormous boost for the sector. Alongside ongoing reforms to planning, this should provide increased confidence for housebuilders across the country. According to RICS data, the gap between housing demand and supply continues to widen, so these new social homes will prove vital for supporting new supply and crucially housing the most vulnerable.
“The £600 million of additional funding for construction sector skills is a decisive investment in the UK’s built environment. This should help secure the next generation of construction sector workers and professionals as we look to tackle the challenge of an aging workforce alongside acute labour and skills shortages. If this can be combined with a new GCSE for the Built Environment in England, we can drive fresh talent to take up the new opportunities afforded by this investment. We are pleased the government will publish plans for much needed business rates reform later this year – hopefully creating a fairer system for businesses as they face increasing financial pressure. Given that the country currently faces deep economic challenges, these measures are certainly positive news for the built environment. While this isn’t everything on our list of asks, this is certainly a step forward. We look forward to its and continuing our conversation with the government as it seeks to transform the built environment.”
When it comes to wider legal services Ian Jeffery, CEO of Law Society of England and Wales said while th ebudget didn’t deliver cuts, more invetsment was needed to protect access to justice.
“A fair and effective justice system requires greater funding and bold decisions. The upcoming spending review needs to provide more funding and resources to fix the courts system, boost legal aid and protect our communities. The industrial strategy will be a key opportunity to unleash the legal sector. In an increasingly uncertain world, as the Chancellor rightly said, legal services can provide a bedrock of stability on which sustainable and resilient growth can be built.”
