Slow and steady, but housebuilding ambitions will have to wait

After the Chancellor’s budget announcement, residential property is taking a backseat as the UK Government focuses on fiscal prudence, growth and the ongoing cost-of-living crisis.

On one hand, you can understand the Government’s reluctance to add further stimulus to housing; house price growth and demand have remained steady in 2023, and any significant help for the market would likely have further stoked inflation.

But given the population is facing rising mortgage bills, steeper rents, and an ongoing undersupply of housing of all types, there was clearly a deliberate decision to alleviate voters’ financial pressures through action on other issues – such as maintaining the energy price guarantee at its current level of £2,500 from April to June. 

Equally the Government is clearly anticipating mortgage costs will continue to reduce through falling inflation and steadying interest rates. The Office for Budget Responsibility forecasts expect the UK to avoid recession and inflation to fall to 2.9% in the autumn which should herald the beginning of the end of further base rate rises. 

On a more upbeat note, the government’s commitment to levelling up through financing urban regeneration and attracting private sector investment will have a positive impact on employment and housing but this is a medium to longer-term play and unlikely to push the dial in terms of housebuilding in the short term.

Similarly, deeper devolution across the rest of England, starting in the West Midlands and Greater Manchester combined authorities, will give local leaders the control to develop housing and infrastructure policies in the years ahead.

For now, there is no indication of how any of these fit with wider planning reform and the Government ambition to build 300,000 new homes annually.

Finally, there was no action on greening our property stock as so many homeowners have more pressing financial pressures to address, but we will need government intervention and support if the UK’s housing stock is to reach its objective of net zero by 2050.

Steve Goodall is managing director of e.surv