Chancellor Rachel Reeves’ Spring Statement focused on economic updates rather than major tax or spending changes. On housing, she emphasised bold planning reforms aimed at boosting housebuilding to its highest level in 40 years.
Key takeaways:
🏡 170,000 extra homes by 2029/30 – a 30% rise from current levels.
🏡 1.5 million new homes targeted this Parliament.
🏡 £2bn investment in the Affordable Homes Programme.
🏡 Economic boost – growth of 0.2% by 2029/30, rising to 0.4% by 2034/35.
Reforms include unlocking land for development while protecting green spaces, with further details expected in the upcoming Long-Term Housing Strategy.
The chancellor Rachel Reeves delivered her Spring Statement in the Common, which was more of an economic update than delivering a raft of tax changes or spending pledges.
When it comes to housing, the chancellor pointed to the government’s reforms to the UK’s planning system, highlighting that it will result in housebuilding being at its highest level in over 40 years, according to the OBR.
She said that the government’s bold planning reforms back the builders not the blockers to deliver an extra 170,000 homes by 2029/30 – boosting homes built by 30% that year after a 13 year house building low in 2025-26.
According to the chancellor, this brings the UK one step closer to the government’s Plan for Change mission to build 1.5 million new homes this parliament with the OBR confirming the government is on track to build an extra 1.3 million homes by the end of this parliament.
Further reforms, such as the Planning and Infrastructure Bill, the government’s long-term housing strategy and the new Affordable Homes Programme – on which the government made a £2bn down payment this week – are not reflected in the forecast and will all help to reach the 1.5 million target.
As a result of the planning reforms the UK’s economic watchdog also think the economy will be 0.2% larger by 2029/30, worth around £6.8bn in today’s prices.
The OBR have also concluded in their forecasting that this could rise to over 0.4% in 2034/35 – meaning billions of pounds more for public services like the NHS and more construction jobs to get houses built for hardworking families.
For a zero-cost policy, this is the biggest positive growth effect the OBR have ever forecast.
The government says the boost to GDP is driven by:
+ Higher productivity in the construction sector, from bringing land on the edges of our largest towns and cities into more productive use, lower planning costs and removing artificial constraints imposed by planning that prevent the construction sector from expanding.
+ A greater flow of ‘housing services’ – there will be more houses for the same number of people, allowing new households to form (e.g. people moving out of their parents’ home into a home of their own). This increases GDP through more rent being paid (where new homes are let out), or ‘imputed rents’ (which reflects what owner occupiers would pay to rent their home on the open market).
+ Beyond the five-year forecast, greater housing availability increases labour mobility which contributes further to growth, by allowing people to move to high productivity places.
Homes will be built on disused car parks and petrol stations, whilst national landscapes and sites of special scientific interest will continue be protected. Government guidance ensures that Green Belt will not be fundamentally undermined.
This features as part of the Plan for Change to get Britain building, which also includes the Planning and Infrastructure Bill currently going through parliament, which the OBR will take a judgement on in due course.
The government will also consult on policies to support a more streamlined and consistent planning system. As part of delivering the Plan for Change milestone to deliver 1.5 million homes by the end of this Parliament, the government will publish a Long Term Housing Strategy and has committed to set out details of further new government investment in social and affordable housing to at the Spending Review this year, following on from the £2bn down payment announced yesterday as well as confirming the government’s plans to provide certainty for the transformative programme of building the new generation of new towns
