Housing delivery under pressure despite policy support

With the recent unveiling of the Chancellor of the Exchequer’s Budget statement, there was limited additional stimulus for the housing industry.

Some Housing led fiscal reforms could have helped add robustness to headroom and boosted growth. The Budget recognised the UK’s severe fiscal pressures but missed a significant opportunity to close the fiscal gap while strengthening the economy: using the housing system as a deliberate lever of fiscal consolidation and growth.

Instead of relying on further pressure on working-age taxpayers or tightening departmental budgets, the Chancellor could have pursued a progressive, multi-lever strategy in which housing acts as both a revenue generator and a cost reducer. In my view, there were three major opportunities that the Budget missed.

A shift to asset-based taxation

The Budget avoided reform of property taxation, despite options that would boost receipts and improve housing market mobility

Phased replacement of stamp duty with an annual proportional property tax.
Aligning capital gains and dividend taxation with income tax rates to rebalance burden from work to wealth.
Time-limited downsizing incentives to release under-occupied family homes.

Treating housing investment as fiscal infrastructure

No move was made to reclassify affordable and social housing as capital investment—despite clear long-term fiscal returns through lower Housing Benefit and health/social care costs.

Mobilising private capital into housing and regeneration

National Wealth Fund and pension reforms could have been utilised to utilise large-scale private investment.

It has been suggested that a housing-led fiscal strategy could deliver £10 - 12bn/year in net fiscal benefits by 2027, boost productivity, increase tax receipts, reduce welfare pressure, and provide visible improvements in living standards. This could also generate training and employment opportunities specifically in the construction sector and related material manufacturing industries.

By not integrating housing into its fiscal model, the Budget failed to leverage one of the UK’s historically strongest long-term growth engines. The opportunity remains, but it will require bolder decisions at the next fiscal event, recognising that fiscal prudence and building more homes are not competing objectives; they are mutually reinforcing imperatives.

Despite this, the budget has reinforced several structural shifts that will shape the development pipeline over the next two to five years.

Further updates from the sector

As SDLT thresholds weren’t changed, the cost of moving remains high, which will have a limiting impact on sales rates and viability for traditional schemes.

Increased property income tax will accelerate the long-term decline of smaller buy-to-let landlords. This will drive continued demand for build to rent, suburban rental and institutional PRS, which will become increasingly central to mixed-tenure delivery strategies.

With a major focus on affordable and social housing, the government reaffirmed significant funds towards the Social and Affordable Homes Programme, and the National Housing Bank. There was also a devolution of funds to metro mayors, which will help locally driven programmes to thrive, with an emphasis on affordable regeneration.

Additionally, £49m was put aside to recruit 350 planners. This will support modest improvements in decision timelines, but the benefits are likely to be slow and uneven.

The government confirmed intention to progress at least three new towns this Parliament.

Implication: Larger-scale opportunities will favour developers with strong infrastructure, placemaking, and partnership capability.

Overall, the sector will be one to watch in 2026 but requires further stimulus from the government in order to really transition from a policy strategy to delivering the 1.5 million homes target.