Property industry leaders are urging the government to prioritise housing policy in this week’s Spring Statement, warning that inaction could further destabilise the market.
With the UK grappling with sluggish growth (0.1% in Q4 2024), a £22 billion public finance deficit and a downgraded growth forecast for 2025 from the Bank of England (from 1.5% to 0.75%) the stakes are high.
The statement is scheduled for Wednesday when Chancellor Rachel Reeves (main picture) will deliver an update on the nation’s finances alongside the Office for Budget Responsibility’s (OBR) latest economic and fiscal forecast.
As the Spring Statement approaches, attention will be on whether the government introduces measures to alleviate mounting pressures in the property market or risks further uncertainty for buyers and developers alike.
LONG-TERM SOLUTIONS
Tony Hall, Head of Business Development at Saffron for Intermediaries, has outlined key reforms that could ease pressure on homebuyers and developers alike.
He says: “Early reports suggest that we’re unlikely to see any major housing announcements in next week’s Spring Statement. While we understand the economic pressures the government faces, we urge Rachel Reeves to look beyond immediate challenges and focus on long-term solutions.”
EXTEND STAMP DUTY DEADLINE
With the current stamp duty deadline fast approaching thousands of buyers risk missing out on tax relief due to delays in transactions.
And Hall says brokers are worried that deals initiated as early as January may not complete in time.
He says: “There’s a significant bottleneck of deals at risk. We urge the government to extend the deadline to support the estimated 75,000 homebuyers who could otherwise face unexpected and higher tax bills.”
AFFORDABILITY BOOST
Affordability remains a key challenge for prospective buyers, particularly as mortgage rates fluctuate and house prices remain high.
Following the Financial Conduct Authority’s (FCA) recent reminder about lender flexibility, Hall is calling for reforms to lending criteria.
“We’d like to see the government increase the loan-to-income (LTI) limit – or scrap the cap altogether – allowing lenders to set their own boundaries while ensuring responsible lending.
“Additionally, greater recognition of rental payment history as evidence of affordability would help more first-time buyers onto the property ladder,” he says.
MORE HOUSING
A persistent lack of housing supply continues to put upward pressure on prices.
Hall points to development bottlenecks, including inconsistent planning rules and labour shortages, as key obstacles to meeting the government’s housing targets.
He says: “A key barrier for homebuyers is actually rooted at the very start of the process: property development.
“Developers face a number of significant challenges, from inconsistent planning rules to labour shortages. One change that could make a real difference would be standardising planning processes across local councils to remove inconsistency between boundaries. Meanwhile, putting schemes in place to encourage more young people into trades would strengthen the workforce and support the delivery of the government’s 1.5 million homes target.”
POLICY ACTION
Industry experts also warn that failing to address these issues could weaken market confidence, with wider economic consequences.
Hall adds: “While we appreciate the economic backdrop, a lack of meaningful housing policy could further dent market confidence – a risky move given the property sector’s crucial role in driving economic growth.”
