Spring Statement

In the Spring Statement, at the end of March, the chancellor reiterated the government’s desire to build more homes – with 1.3m expected to be built across the UK by the end of this Parliament.

The Spring Statement was largely just that. It was not intended to be another Budget, as that’s now reserved for the Autumn. This event was simply an update of where we currently are in relation to the Budget forecasts from last November, and how that’s been affected by subsequent events in both the UK, and overseas (largely relating to the developments in the US).

Economy and Inflation

Over this period, the economic outlook has deteriorated slightly, resulting in the Office for Budget Responsibility (OBR) reducing its 2% GDP growth forecast for 2025 (at the time of the Budget) to 1%, but they expect the economy to improve across the rest of the decade.

The same is applicable to the OBR’s inflation forecasts for 2025. That’s been revised upwards to 3.2% this year (with a peak of 3.8%), before reducing to the 2% target by mid-2026 onwards (albeit this was set out prior to the Trump tariffs announcements).

Additionally, the £10bn buffer against the targets set in the Autumn Budget had been wiped out. However, action taken by the government to reduce its welfare costs, along with cuts to departmental spending, has helped to reintroduce the £10bn buffer.

Future tax rises?

The OBR felt that this amount is wafer thin, and any unexpected event(s) could wipe it out, which may then result in possible tax rises in the Autumn 2025 Budget.

Housebuilding targets

The most interesting aspect of the Spring Statement was the government’s continued recognition that the housing market is a pillar of the UK economy. And this is reflected in its desire to implement planning reforms that, as they regularly say, back the builders, not the blockers.

And, according to the OBR, they feel the government is on track to build an extra 1.3m homes, throughout the UK, by the end of this parliament. In fact, the OBR feels that if these targets are met, then the economy may be 0.2% larger by 2029/30 – equating to almost £7bn (at today’s prices).

Other elements need to fall into place

The government has announced £600m of funding to train up 60,000 additional skilled construction workers, but little has been said, so far, in terms of what it might deliver for purchasers.

Albeit, the regulator for this sector, the Financial Conduct Authority, is starting to look at relaxing the mortgage affordability rules to enable borrowers to secure slightly larger sums.

Also, reforming the planning system is a step in the right direction, but the industry will also need to see that the demand is there from potential buyers.

Where we can help

Additionally, we fully understand that it’s likely we’ll need to consider the extra costs you may face from April onwards. That could be as a business owner facing higher National Insurance and Business Rate costs, or as a homeowner (or renter) with higher energy, water, mobile phone, and Council Tax charges. And as for the impact of the Trump tariffs…

The Financial Conduct Authority does not regulate taxation advice.

Your property may be repossessed if you do not keep up repayments on your mortgage.

(Source: Office for Budget Responsibility, Economic & Fiscal outlook, March 2025)