Chancellor Rachel Reeves’ Spring Statement has received an underwhelming response from the property sector.
The statement includes the government doubling down on its commitment to “back the builders”, with the OBR forecasting 1.3m homes being delivered in this parliament.
Melanie Leech, chief executive of British Property Federation said: “We would have liked the chancellor to unlock even more investment in the context of regulating for growth. Delays caused by the Building Safety Regulator are still blocking new home delivery, pension funds need to be allowed to invest more in UK property, and further planning reform is needed to make it easier for institutional money to fund more social and purpose-built private rented homes.
“We need the whole industry to be firing on all cylinders, including our under-resourced planning departments. That means 3,000 more planners rather than the 300 that have been pledged and we would urge government to consider how its Transformation Fund can be used to enhance skills and capacity.”
James Dickens, managing director of Birmingham-based regeneration specialist Wavensmere Homes, said: “The economic cost of Reeves’ increases to National Insurance, Living Wage and Stamp Duty will lead to hospitality operators going out of business, be felt by the pockets of all those looking to move on to or up the property ladder, and by the housebuilders vying to deliver energy-efficient new homes.
“Next week’s rises will be a bruising hit to all businesses that are heavily reliant on labour. Unless something is done to support hospitality, the decimation of that industry is very real. We are dealing with multiple quality operators across a number of city centre schemes where they are the bedrock of the placemaking we are trying to create. These venues are unable to move forward without some positive intervention and clarity of where their operational costs are going to end up.”
Allan Wilen, Glenigan’s economic director, added: “The Spring Statement is hardly a game-changer for construction, but no news is good news. Developers have been waiting on the sidelines, and if confidence returns, we could see a surge in project starts. Glenigan data shows that £129bn worth of projects have secured planning approval over the past year, and many of these schemes could now break ground.”
Jennet Siebrits, CBRE’s head of UK research, said: “The improved commitment to the delivery of affordable housing in the UK marks a step in the right direction and should help resolve short-term uncertainty as the current Affordable Homes Programme comes to an end. While 18,000 homes only accounts for 1.2% of the government’s overall housing target, it is a significant number and the requirement to build during this parliamentary term ensures quick action will follow.”
“However, it is not just affordable housing that is needed. Building across all tenures is a must and this includes attractive offers for the elderly looking to downsize, the private rental sector and the rapidly expanding build-to-rent market. We have seen a slowdown in development for build-to-rent and single-family housing schemes, largely a result of planning constraints and the building safety act, and we must now look at the reasons behind this to unlock further growth opportunities.”
“Boosting house building will help support the wider growth agenda, as 834,000 people work in the house building industry. The economy would also benefit from a pick-up in ancillary activities such as removals. For example, UK households spend £7,000 on average on furniture and decoration when moving home. With this in mind, estimates suggest each new dwelling built supports up to 3.4 jobs.”
Simon Rawlinson, head of strategic research at global consultancy Arcadis, said: “Rachel Reeves kept her focus on the big picture in her Spring Statement, highlighting increases in defence spending and capital investment without getting into the detail. Confirmation of projects in favour will have to wait for the Comprehensive Spending Review as will the search for rebadged and reheated project announcements.
“The OBR’s upgrades to growth figures from FY 26/27 onwards are welcome as is the assessment of the impact of government measures on long term growth. It’s worthwhile remembering that these come on top of big interventions in investment incentives and childcare by the previous government – growth is difficult and expensive to promote, but it may be worth it in the end.
“The construction industry will take comfort that the chancellor focused on our sector in the speech rather than on health or education. Our sector benefits from the borrow to invest fiscal rule. Housebuilders may also start to breathe a sigh of relief as housing targets are adjusted in line with reality. 1.3 million homes by the end of the parliament will still be in ‘touching distance’ of ambition, but the important thing is that changes to the planning system will make a permanent impact on growth.
“Reeves has been badly knocked off course in the first nine months of this parliament but seems to have succeeded in persuading the OBR that the medicine will work. When it comes to investment, only time will tell.”
Lee Elliott, global head of occupier research at Knight Frank, said: “This was a budget that sought to reassure rather than reinvent. With business confidence still fragile – especially in manufacturing – many had hoped for bold measures to unlock investment and support growth. Instead, today’s announcements were light on direct business interventions. The rise in the National Living Wage to £12.21 will be welcomed by workers but adds pressure for employers already balancing rising costs. And while welfare reform and increased defence spending show fiscal intent, they offer limited immediate benefit to the broader business community.
“The UK’s tight labour market, with unemployment still low but economic inactivity stubbornly high, remains a critical challenge. Yet there was little in this Budget to address skills gaps, hiring constraints or long-term workforce participation. There’s a clear message of control and stability – but sentiment alone won’t drive hiring, productivity or innovation. If this Budget was about laying the groundwork, the next must be about delivery.”
Craig Carson, managing director at Barratt West London, said: “London faces a set of unique housing challenges, with an acute shortage of homes across all tenures. Key to boosting housing delivery is working in tandem with partners to unlock land opportunities and create a strong delivery pipeline of private and affordable homes, such as our partnership with Asda at Park Royal and Places for London at Bollo Lane. We therefore welcome the government announcement of a further £2bn of investment into affordable and social housing, demonstrating serious ambition to build record levels of new homes.”
Paul Rickard, chief executive at Pocket Living, said: “Major reform of the planning system remains a vital priority but cannot be achieved without significant additional resource. Ahead of the Spending Review, as an SME housebuilder, we are more susceptible to any reductions in planning and place-making capacity within local authorities. To mitigate any negative impact of spending constraints on either planning reform, or support to the SME housebuilding sector, we are exploring with the government a number of initiatives, and would hope to establish a dedicated planning reform and SME market access strategy transformation fund, within the government’s wider proposed transformation fund, to help both councils and the industry maximise the opportunities from planning change and help deliver housing growth at a local and regional level.”
Image © James Veysey/Shutterstock
Send feedback to Akanksha Soni
