2025 Spring Statement: What does it mean for the property industry?

No U-turn on Stamp Duty

Many prospective house buyers and property industry workers were hoping for a U-turn on stamp duty thresholds in yesterday’s Spring Forecast. However, with no changes in this area, first-time buyers will now need to make sure their budgets will accommodate the cost increase. As a result, some buyers may need rethink location or property type. On the positive side, competitive mortgage rates could still encourage first-time buyers to get on the property ladder. While the statement wasn’t packed with tax changes or spending pledges, the government highlighted that housing remains a central pillar of the government’s growth strategy.

1.3 million homes to be built by 2029

The Chancellor emphasised that reforms to the UK’s planning system will lead to the highest level of housebuilding in over 40 years, with an additional 170,000 homes expected by 2029/30. This follows a 13-year low in housebuilding in 2025-26. The government's ultimate goal is to deliver 1.5 million new homes by the end of this Parliament, with the OBR confirming that 1.3 million homes are expected to be built by 2029, at a rate of 305,000 every 12 months. Reeves suggested that key initiatives, including the Planning and Infrastructure Bill and a £2bn investment in affordable housing, will help achieve this target.

A new era for housing?

As part of the broader “Plan for Change,” the government is also introducing a long-term housing strategy and consulting on policies to streamline and improve the planning system. This plan aims to provide more certainty for future housing projects, including a transformative programme to build new towns. Reeves highlighted £2 billion of investment in 18,000 affordable and social homes announced earlier. The government is also set to announce further investments in social and affordable housing during the upcoming Spending Review.

Economic impact

According to Reeves, these reforms are projected to increase the UK’s economic output by 0.2% by 2029/30 (equivalent to £6.8bn). By 2034/35, this could rise to 0.4%, boosting public services like the NHS and creating more construction jobs. According to the government, this growth will be driven by higher productivity in construction, greater housing availability, and increased labour mobility.

Focus on sustainable development

The chancellor emphasised sustainability, noting that while the government is pushing for more homes, it promises to protect national landscapes and Green Belt areas. New homes will be built on disused sites, such as former car parks and petrol stations, to minimise environmental impact. Reeves aims to increase GDP through these reforms The OBR has lowered its UK growth forecast for 2025 to 1.0% but increased its predictions for future years. The revised growth rates are expected to be 1.9% in 2026, 1.8% in 2027, and 1.7% in 2028, suggesting a positive outlook for the economy. The government's planning reforms are expected to help reach its goal of building 1.5 million homes, with the OBR forecasting 1.3 million new homes over the next five years. These changes are expected to increase GDP by 0.2% by 2029/30, and by 0.4% by 2034/35.