8:35 AM, 4th March 2026, 1 day ago
Property industry experts have warned that the Chancellor’s Spring Statement lacked ambition, as new figures suggest housing supply is set to fall.
Chancellor Rachel Reeves delivered the government’s Spring Statement to Parliament, claiming the government’s economic plan was working.
However, forecasts from the Office for Budget Responsibility indicate that house prices are expected to rise by 2% this year and increase by 16% between 2030 and 2031.
Housing targets won’t be met
Despite the government’s manifesto commitment to build 1.5 million homes by the end of this Parliament, the OBR figures indicate this will not be achieved.
Adrian Plant, director of SOWN, pointed out that the OBR now expects net additions to the UK housing stock to fall to around 220,000 in 2026–27 (lower than in the early 2020s) before recovering to just over 305,000 by 2030–31.
He said: “Not only is it an admission that annual housing targets cannot be met, but it is a clear reminder that planning reform is not a quick fix, the hard work of turning policy into local plans, permissions and completions takes time.
“Ministers have been frank that higher supply should flatten or reduce house prices. Now that the government has admitted that, in the short term, housing delivery will continue to fall, it is clear that house prices will rise, to the detriment of first-time buyers.”
Tougher path to homeownership
Using the OBR’s projections, Coventry Building Society calculated what average house prices could reach if all regions rise in line with forecasts. The average UK house price would increase from £270,259 to £314,581.
In London, the average price would rise from £551,294 to £641,706. The average first-time buyer price in England would climb from £244,799 to £284,946, while in London it would increase from £470,503 to £547,665.
Sarah Brown, senior strategy manager at Coventry Building Society, said: “While a steady rise in house prices may be reassuring for existing homeowners, it risks making the path to homeownership even tougher for aspiring buyers. Even relatively modest annual growth quickly adds up, and a 16% increase by the end of the decade could mean needing tens of thousands more for a typical purchase.
“For first-time buyers in particular, higher prices don’t just raise the deposit hurdle, they also increase the size of the mortgage needed to get on the ladder. That makes it more important than ever for buyers to plan ahead, build savings early, and seek advice on the options available to them.
“The key question now is whether earnings can keep pace with house price growth. Interest rates also play a role in shaping what borrowers can realistically borrow and repay. Without supportive income growth, or easing borrowing costs, many new buyers may find the goalposts continuing to move further out of reach.”
More ambitious investment
Propertymark claimed the Spring Statement did not provide investment for the housing market.
Nathan Emerson, chief executive of Propertymark, said: “The Spring Statement underscores the ongoing pressures in the UK housing market, particularly around affordability for renters and first-time buyers. While it does not introduce major new housing policies, the focus on supporting economic stability and the commitment to implement planning reforms by the end of the year are welcome steps.
“However, while a commitment to stability is positive, the UK government needs more ambitious investment to ensure that the UK’s housing needs are met. Latest figures from the Office for National Statistics show that just over 100,000 homes were completed between January and September 2025, an 11% decrease from the same period in 2024.
“Mortgage approvals remain below pre-pandemic levels, and house prices continue to rise modestly, leaving many prospective buyers struggling to enter the market. Stamp Duty remains a significant barrier to mobility. Past Stamp Duty holidays have shown that relief can stimulate transactions and speed up sales, yet current thresholds do not reflect regional price differences, meaning some first-time buyers still face substantial upfront costs.”
High demand and limited supply
He adds: “Pressures in the rental market are equally acute, with high demand and limited supply having placed upward pressure on rents. Supporting investment in new rental housing is essential to meet demand, improve affordability, and provide tenants with secure, reasonably priced homes.
“Initiatives that encourage development across all tenures will help balance supply and demand, easing cost pressures for renters while also enabling first-time buyers to step onto the property ladder.
“As the Autumn Budget approaches, the UK government has the opportunity to implement policies that make a real difference. Revising Stamp Duty thresholds and supporting investment in the private rented sector would improve market efficiency, increase housing supply, and address affordability challenges for both renters and buyers.”