Spring Statement 2026 Highlights Housing Supply Challenges

Chancellor Rachel Reeves delivered the Spring Statement 2026, presenting the government’s economic plan as effective. However, property industry experts have expressed concerns that the statement lacked ambition, especially regarding housing supply and affordability.

According to the Office for Budget Responsibility (OBR), house prices are projected to rise by 2% this year and by 16% between 2030 and 2031. These figures suggest that the government’s manifesto pledge to build 1.5 million homes by the end of this Parliament will not be met.

Housing Targets Unlikely to Be Achieved

Adrian Plant, director of SOWN, highlighted that the OBR forecasts net additions to the UK housing stock will fall to around 220,000 in 2026–27, which is lower than levels seen in the early 2020s. This figure is expected to recover slightly to just over 305,000 by 2030–31, but still falls short of government ambitions.

He commented: “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.”

Plant further noted that the government’s own admission that housing delivery will decline in the short term implies house prices will continue to rise, negatively impacting first-time buyers.

Rising House Prices and Impact on Homeownership

Using OBR projections, Coventry Building Society calculated the potential rise in average house prices across the UK. The average price could increase from £270,259 to £314,581. In London, prices may rise from £551,294 to £641,706.

For first-time buyers, the average price in England is expected to climb from £244,799 to £284,946, while in London it could 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.”

She added: “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.”

Brown emphasised the importance of earnings growth and borrowing costs, stating: “Without supportive income growth, or easing borrowing costs, many new buyers may find the goalposts continuing to move further out of reach.”

Calls for More Ambitious Investment in Housing

Propertymark criticised the Spring Statement for lacking new investment in 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.”

Emerson pointed to recent data showing a decline in home completions: “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.”

He also highlighted that mortgage approvals remain below pre-pandemic levels and house prices continue to rise modestly, which together create barriers for prospective buyers. Stamp Duty was identified as a significant obstacle to market mobility, with current thresholds failing to reflect regional price differences, meaning some first-time buyers still face substantial upfront costs.

Rental Market Pressures and the Need for Balanced Supply

Emerson added: “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.”

He suggested that initiatives encouraging development across all tenures would help balance supply and demand, easing cost pressures for renters while enabling first-time buyers to enter the market.

Looking ahead to the Autumn Budget, Emerson urged the government to consider policies that could make a tangible difference, such as revising Stamp Duty thresholds and supporting investment in the private rented sector to improve market efficiency, increase housing supply, and address affordability challenges for both renters and buyers.

What This Means for Landlords and Agents

The projected decline in housing supply and continued house price growth suggest ongoing challenges for landlords and letting agents. Rising prices may limit the pool of potential first-time buyers, potentially increasing demand in the private rented sector. However, affordability pressures on tenants could intensify, requiring landlords to be mindful of rent levels and tenant support.

Planning reforms and government commitments to economic stability may provide some long-term benefits, but the lack of immediate investment means supply constraints are likely to persist in the near term. Landlords and agents should monitor policy developments closely, particularly those related to Stamp Duty and rental sector investment, as these could impact market dynamics.

Suggested internal link anchors

• housing supply
• house prices
• first-time buyers
• planning reform
• Stamp Duty
• private rented sector
• rental market pressures
• mortgage approvals
• housing affordability
• housing completions
• economic stability

TLA update

TLA is launching a new Trusted Partners Hub in Q1 2026, featuring verified and approved service providers selected to support landlords, tenants, and property management businesses. We are inviting legal, trades, insurance, financial, mortgage, tenant screening, and other service providers to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/