Little of Note For Housing Market In Spring Statement
Author: Tom Stevenson
Mortgage Correspondent
The Chancellor, Rachel Reeves, delivered her Spring Statement (26 March 2025) today. It was a much more sober affair than her budget in Autumn, which announced tax rises of £40 billion.
It was a more incremental budget without the eye-popping headlines of October. However, there were still a few interesting announcements that impacted not only the housing market but the wider economy.
One of the Chancellor’s most interesting announcements reiterated Labour’s commitment to build 1.5 million new homes. The Chancellor stated that the planning system the government inherited was “far too slow”.
She stated that Labour’s reforms, including building more houses near commuter train stations and axing the red tape that slows down the approval of infrastructure projects, will lead to the construction of 1.3 million new homes in the next five years.
The Chancellor stated that the Office for Budget Responsibility (OBR) assessed Labour’s plans, which “will lead to housebuilding reaching a forty-year high”.
The plans the Chancellor refers to are the National Planning Policy Framework (NPPF), which was set out in the Planning and Infrastructure Bill. The NPPF will see the reintroduction of housing targets and the use of brownfield sites.
As well as the plans leading to a high in housebuilding, the Chancellor stated the plans, along with an increase in capital spending, will result in a permanent increase of 0.6% in the level of real GDP in the next 10 years.
The Chancellor stated this will be close to “taking us within touching distance” of reaching the government’s goal of building 1.5 million homes by the end of the parliament in 2029.
She went on to say, “The impact on our economy goes further still. I said at the election that we could not simply tax and spend our way to prosperity. We need economic growth. So I can today confirm that the effects of our growth policies, including our planning reforms, mean an additional £3.4bn to support our public finances and our public services by 2029-30.”
The plans are bold and will help address the country’s housing shortage. If they succeed, this will be a welcome boost to many first-time buyers looking to get on the property ladder and anyone looking for more choices in the housing market.
However, aside from this, there was little regarding the housing market mentioned in the Spring Statement.
The only other nod to the housing market in her speech was that the government was investing £2 billion in social and affordable homes, with a further £600 million being used to train 600,000 new construction workers.
The latter investment is hoped to result in 18,000 new homes. In contrast, the investment in social and affordable housing will allow “local areas to bid for new development across our country,” which will provide “more security for families.”
Compared to the Autumn Statement, which saw sweeping changes to Stamp Duty rates due to come into force on 1 April, the Chancellor’s speech contained little new of note. Despite the industry’s wish for a u-turn on the changes in Stamp Duty thresholds, no change was announced.
Nor was there an announcement of a new government scheme to help first-time buyers get on the property ladder.
For the housing market, the Spring Statement was almost a non-event. The statement’s overwhelming focus was on the wider economy, with the cuts to benefits being the primary topic of the Chancellor’s speech.
The focus will be on how the changes in Stamp Duty thresholds affect the housing market and whether they lead to decreased or increased activity. If the former, the Chancellor may be forced to make changes in the autumn to try to reinvigorate the market.
However, given that the broader economy is flatlining and the potential impact of tariffs from the Trump administration hangs over the government, it’s hard to see how things will play out at the moment.
Our Managing Director Pete Mugleston, had this to say on the Spring Statement:
"Compared to the Autumn Statement, this was almost a non-event with little of note announced. No doubt, the Chancellor will have been pleased to see inflation drop to 2.8% before she made her speech, but there was little in the speech that will convince the markets or the wider public that the country is on the right track no matter what she says. At the end of the day, the British public will want to see that the Chancellor's policies bear fruit, with the OBR forecasting growth to halve from 2% to 1% this year. She's running out of time to produce those results."
Pete Mugleston
Managing Director
The Spring Statement offered little for prospective buyers, those looking to invest in the property market, or those remortgaging soon. But with house prices rising, interest rates slowly falling, and inflation surprisingly decreasing, the immediate prospects for the housing market look positive.
If Labour can follow through on its pledge to build 1.5 million homes by 2029, the prospects could look even better.
Tom Stevenson
Mortgage Correspondent
Tom’s main role at Online Mortgage Advisor is to cover the housing market and write engaging and thoughtful pieces on what this means for the average person. With a background in construction and a keen interest in the world of property, Tom offers insightful thoughts on the world of mortgages and the state of the housing market in general.