Today’s Spring Statement was light on new measures for the mortgage and housing markets, with no reprieve for buyers trying to beat this week’s stamp duty deadline and no new mortgage scheme for first-time buyers.
Chancellor Rachel Reeves confirmed a new £2 billion package of new grant funding to deliver up to 18,000 new social and affordable homes, helping the government to meet its 1.5 million housebuilding target.
Reeves also claimed that Labour’s planning reforms will permanently increase GDP by 0.2% by 2029/30 and increase GDP by 0.4% within 10 years.
She said this is “the biggest positive growth impact that the OBR have ever reflected in their forecast”, adding that it puts the government “within touching distance” of its target of building 1.5m new homes over this parliament.
Industry experts share their thoughts on today’s speech and what it means for the property and mortgage markets.
Paresh Raja, CEO of Market Financial Solutions, said: “Overturning outdated parts of government to improve efficiency has been a major focus for Labour since the election, and planning reform was raised again as a key part of this agenda. However, the “get Britain building” rhetoric must now translate into tangible action – bringing in new construction workers is a positive step, as the Chancellor had already announced three days ago, but much of today’s speech involved repeating the Autumn Budget’s plans to encourage housebuilding.
“Reforming the planning system is obviously important. However, investors and developers are unlikely to commit to new projects unless they see a strong and growing economy that provides long-term confidence and a return on their investment. The OBR forecasts were a blow in this regard, and the onus must now be on turning the corner to turbo-charge GDP growth.
“House prices are rising, inflation fell in February, and the base rate is expected to come down further this year. These are all positives, highlighting that the property market remains bouyant, and this is important given how significant the sector’s contribution to GDP is. In future statements and budgets, we need the Chancellor to focus more energy on supporting homebuyers and borrowers, which will further stimulate growth in the market.”
Tim Parkes, CEO of RAW Capital Partners, commented: “It might not have the standing of the Autumn Budget, but the Spring Statement was an opportunity for the government to set out a bold vision for growth nonetheless. However, today’s speech highlighted that there remains a keen focus on fixing legacy issues, both with the state of the economic and within the property sector, most notably where housebuilding is concerned. This is, of course, important. But the UK also needs a more proactive and forward-thinking strategy to meaningfully encourage economic growth.
“Creating the right conditions for investment should therefore be the government’s top priority if it hopes to attract both domestic and international capital. This means not just stabilising the economy and filling the fiscal blackhole, but fostering an environment where businesses and investors feel confident to commit to the UK for the long term.
“But the government can’t do it all on its own, so specialist lenders have a key role to play in facilitating overseas investment into UK property and contributing to a growing economy. By offering a tailored approach to lending and bespoke financial products, they can help international investors navigate the market with greater confidence, while reinforcing the UK’s position as a prime destination for investment.”
Richard Donnell, executive director at Zoopla, added: “The housing market needs a strong and growing economy to support housing supply. It’s promising to see the Government focusing on longer-term impact by boosting funding for new homes and avoiding short-term measures like stamp duty holidays that don’t really help with the fundamental challenges in the housing market.
“The top priority should be an easing of mortgage regulations, which will support first-time buyers, an important buyer group for homebuilders and the broader market.
“This would also help the rental sector, where there are still 12 people chasing every home for rent, with those on low incomes bearing the brunt. Increased funding for social housing is essential in the upcoming Spending Review to help support housing delivery and boost the stock of social rented homes, which has been static for 30 years.”