In a statement released yesterday, the minister of state for housing, Matthew Pennycook, said the budget ‘brings with it the prospect of thousands of new homes’, along with ‘hundreds more planners to turbocharge housebuilding ‘.
‘In terms of housing, thousands of much-needed new homes are set to be unlocked in London through the extension of the DLR to Thamesmead’, the minister said. ‘The extension of the line will not only boost connectivity and cut commuting times, but unlock 25,000 new homes and up to 10,000 new jobs’.
The north will also benefit, he added, with the new Leeds City Fund set to ‘bring with it thousands of new homes, as part of a major injection of investment in housebuilding, public spaces and the city’s transport network’.
A £48 million overhaul of the planning system will boost capacity and capability, the minister continued, ‘with hundreds more planners set to supercharge the government’s commitment to build 1.5 million homes.’
But many experts are dubious about the impact the measures announced in the budget will have on the government’s home-building targets.
Jack Fletcher-Price, equity analyst at Morningstar, said the budget’s impact on housebuilders will be minimal:
“The UK budget offers little relief for homebuilders. The OBR’s downgrade to household disposable income and upward revision to inflation point to a tougher macro backdrop, likely weighing on housing demand and sector shares. The absence of any update on abolishing stamp duty on properties under £500k may also disappoint the market.”
Adam Day, head of real estate brokerage eXp UK and Europe, was similarly sceptical:
“When it comes to housing delivery, the industry is inclined to take government claims with a bag of salt rather than a pinch. Time and time again we have heard recycled rhetoric about boosting housing supply and time and time again we have watched successive governments fall well short of their own targets.
“The commitment to long term planning reform is welcome in principle, but the sector now needs to see genuine delivery rather than another round of ambition without action.
“New housing supply is vital in preventing prices from becoming artificially inflated and in creating genuine routes into homeownership for aspiring buyers. Without a steady pipeline of homes, affordability remains stretched, mobility stalls and the next generation struggles to take its first steps onto the ladder. If the government is serious about addressing the structural issues in the housing market, then it is time to walk the walk instead of simply talking the talk.”
Felicity Barnett, new build and affordable housing partnerships manager at the Mortgage Advice Bureau, said the budget overlooked a critical aspect of the market:
“The lack of updates in the autumn budget was a missed opportunity to tackle the most fundamental issue in housing: supply. Setting a target of 1.5 million new homes is useless if the planning system is a massive bottleneck, with permissions taking up to seven months in some areas, and the government needs to urgently cut the red tape holding up construction.
“Instead of rehashing old initiatives, we need smarter, highly targeted support to get more aspiring homebuyers on the ladder. We should look at models like the First Buy scheme, which limited buyers to purchasing a home only one bedroom larger than their needs. This ensures aid goes directly to those who need it most, rather than unnecessarily inflating the entire market.”
Omar Al-Hasso, CEO of affordable housing provider SimplyPhi, said the chancellor had failed to address the diversity required in housing supply:
“While new build delivery is undoubtedly an important part of the picture, this approach fails to address the diversity of housing required to meet existing needs, especially the critical demand for temporary accommodation.
“Prioritising new build housing delivery offers a medium to long term fix to a clear and present immediate housing crisis, as it takes years to obtain planning permission and then build out developments and is comparatively more costly than making use of existing housing stock.
“The chancellor has missed an opportunity to use the budget to reform Local Housing Allowance (LHA) rates, indexing them to inflation or preferably re-basing them relative to live market rent as originally structured. This would not only open up more affordable private rented housing stock but would reduce risk for local authorities raising institutional investment from the private sector, to bring forward more immediate housing supply.”
However, Simon Vernon-Harcourt, design and planning director at City & Country, believes the chancellor was right to look at the bigger picture:
“We’ve seen what’s possible before. In the 1950s and 60s, the UK was building around 200,000 homes a year, driven by ambitious councils and smaller builders, yet we’re still falling short of that today… Labour’s plans to rethink the green belt and introduce the concept of a ‘grey belt’ are bold but necessary steps to build where people actually want to live.
“But building homes also means investing in people. The construction sector can be a real engine of growth if we put the right focus on training and encourage more people into the trades. We can’t build homes without skilled hands – and funding to make training apprentices aged under 25 and under free for SMEs is a step in the right direction.
“The goal shouldn’t just be to build more houses, but to create places people are proud to call home.”
Sarah Fitzpatrick, head of planning at Norton Rose Fulbright, agrees that grey belt building is the key to meeting targets:
“The government’s commitment to accelerate planning approvals and unlock grey belt land signals a decisive push to meet housing targets. If these reforms deliver as promised, we could see housebuilding reach levels not seen in decades. The budget confirmed mandatory local authority reviews of Green Belt boundaries by 2027, prioritising grey belt release for housing, alongside a £2 billion fund for brownfield and grey belt infrastructure support.”
CPRE chief executive Roger Mortlock said the countryside organisation was pleased to see the commitment to supporting local planning departments, but encouraged a stronger focus on renewable energy and brownfield land.
“We need a properly funded planning system that works to ensure homes and infrastructure are delivered in a way that benefits people and mitigates harm to the planet. But this commitment will achieve little, if environmental protections are watered down for the benefit of big housebuilders and energy giants.
“Rather than building energy infrastructure in our treasured landscapes and identikit executive homes across the countryside, the government could be investing in rooftop solar and regeneration rundown urban centres by building the affordable homes people need and safeguarding green spaces. England alone has enough brownfield land for 1.4 million homes and rooftops could generate more than 60% of the UK’s solar energy target.”
