A SPRING STATEMENT WITH NO SURPRISES, BUT WHAT’S NEXT?
Rachel Reeves’ recent Spring Statement didn’t send shockwaves through the property and real estate industry. Instead, she reiterated the government’s existing plans, which I have previously shared my thoughts on.
It was steady, expected, and lacking major new announcements.
But does that mean there’s nothing to talk about? Far from it.
As we head further into 2025, economic conditions are shifting. Inflation has eased to 2.8%, inching closer to the Bank of England’s 2% target. This opens the door for potential interest rate cuts as early as May. Welcome news for mortgage holders and property investors alike.
Yet, buyer affordability remains a crucial factor in market momentum, and UK housebuilder share prices have barely moved since the Spring Statement. And for investors, both in the UK and overseas, the landscape has become even more challenging. Part of the reason? The recent changes in Stamp Duty Land Tax (SDLT), which came into effect on 1st April.
- The temporary lower thresholds introduced in the September 2022 budget have now been reversed. The zero-rate threshold for main residences has dropped from £250,000 to £125,000, and the first-time buyer threshold has fallen from £425,000 to £300,000.
- On top of that, the additional SDLT rate for residential properties in the UK had already increased from 3% to 5% in the Autumn 24 budget, immediately adding extra costs for property investors and second-home buyers.
These shifts mean that, even if mortgage rates ease, the upfront costs of buying a home have just increased for many. So, while the government talks about boosting housebuilding, affordability pressures remain a major obstacle.
The big question: will Britain truly get building again?
With Labour’s ambitious housebuilding targets, the long-debated Planning and Infrastructure Bill aiming to cut through red tape, and a looming Spending Review in June that could set the sector’s trajectory, there’s a lot to unpack.
THE PLANNING AND INFRASTRUCTURE BILL: A GAME CHANGER?
The government has committed to delivering 1.3 million new homes in the next five years as a result of changes to the National Planning Policy Framework (NPPF). That’s an ambitious target, no doubt… well the highest in 40 years to be exact.
To make it happen, the Planning and Infrastructure Bill is set to remove blockers that slow down decision-making. The idea is simple: streamline approvals, get projects moving faster, and inject life back into the housebuilding sector.
But will it actually work?
Historically, planning reforms have faced resistance from local councils, environmental concerns, and even logistical constraints. Speeding up decisions sounds great in theory, but without significant investment in local authority planning departments, developers could still find themselves tangled in bureaucracy.
And then there’s sentiment. Right now, confidence in the housing market is lukewarm at best. Even with policy changes, developers won’t break ground if demand remains uncertain.
I believe reforming planning is a step in the right direction, but it’s only one piece of the puzzle. To truly get Britain building again, we need to see more action on funding, skills, and long-term investment strategies.
FUNDING, RESOURCES & WORKFORCE: CAN THE SECTOR DELIVER?
Even if planning reform removes red tape, does the UK property sector have the resources to meet these ambitious goals?
Labour’s housebuilding target isn’t just a numbers game, it requires skilled labour, material supply chains, and funding. Currently, there are significant concerns around:
- Workforce shortages – The UK’s construction industry has been grappling with a skills gap for years. More homes mean more builders, planners, and surveyors. There’s budget to address this but will it be enough?
- Financing challenges – With interest rates still relatively high, will developers feel confident enough to borrow and invest in large-scale projects?
- Infrastructure beyond homes – Schools, transport links, and clean energy infrastructure must support new developments, yet investment here remains unclear.
Without answers to these challenges, even the best-laid plans could struggle to translate into real progress.
HOUSING AFFORDABILITY: THE KEY TO UNLOCKING SUPPLY
One of the biggest reasons UK housebuilder shares remained unmoved post-Spring Statement is simple.
Buyer affordability.
Yes, an interest rate cut in May could help, but with house prices still high and real wages only slowly catching up, many potential buyers remain priced out. A healthy property market needs both supply and demand. Right now, the affordability gap is still a major issue.
More social and affordable housing is also crucial. Too many people in the UK are struggling to access safe, affordable homes. The government has spoken about this issue, but tangible action is yet to be seen.
As the Office for Budget Responsibility (OBR) suggests, delivering on housing targets could help boost the overall GDP by £6.8 billion by 2029. That’s a significant economic incentive, but only if the sector gets the right level of support.
JUNE’S SPENDING REVIEW: THE REAL TEST?
If the Spring Statement lacked surprises, June’s Spending Review could be the real moment of truth. That’s when we’ll see whether the government is willing to back its ambitions with long-term financial commitments.
Will we get clear investment plans for housebuilding, infrastructure, and workforce development? Or will it be another case of big targets without the backing to deliver?
The answer to whether Britain will get building again doesn’t lie in policy statements alone. It lies in real action, funding, and market confidence.
As we wait for June, one thing is clear: the potential is there, but the government, industry, and investors need to align for it to become a reality.
A MARKET IN TRANSITION
So, will Britain get building again?
The foundations are being laid, planning reforms, potential rate cuts, and ambitious targets. But whether these translate into actual progress depends on a mix of market confidence, funding, and government action.
It’s not just about setting targets, it’s about making them achievable. If the government can back up its promises with real investment and support for developers, we could see real momentum. But until then, the industry remains in a wait-and-see mode.
For now, all eyes are on June. That’s when we’ll know whether the government is serious about delivering on its housing goals, or if the sector will continue navigating uncertainty.
Let’s see if Britain really does get building again.
