Economic backdrop
The absence of any measures in the Budget to stimulate either the housing market, or the wider economy, is disappointing. However, on a more positive note, the Budget included measures to strengthen planning capacity and confirmed the permanent 95% mortgage guarantee scheme, which should help first-time buyers. While no immediate stimulus was announced for the housing market, these steps, combined with expected interest rate cuts, provide some grounds for cautious optimism. Longer-term reforms to planning and infrastructure signal a commitment to boosting housing supply, with net additions forecast to rise significantly from 2027 onwards. Lenders continue to prioritise well-located, de-risked schemes where delivery is more certain.
Housing market trends
House prices have remained relatively static, rising by roughly one per cent over the past year, with performance split sharply by geography. Northern cities and regional centres have been more resilient, while London and much of the South East remain constrained by affordability pressures.
In the land market, there is still competition for sites with clear planning prospects and infrastructure certainty. Deals increasingly involve risk-sharing structures: conditional contracts and phased payments are now standard tools to keep transactions moving.
Looking ahead
The Government’s reforms may present once-in-a-generation opportunities on paper, but the market’s ability to convert the limited consents into deliverable housing is still limited by finance, capacity and planning performance. This gap is becoming one of the defining issues of the current cycle.
As ever, robust exit strategies remain essential. In today’s market, success depends not only on securing land, but on knowing precisely how and when it can be delivered or disposed of in the current planning environment. Developers who remain flexible in their approach will be best positioned to manage risk and capture any upside that emerges.
Small and medium-sized enterprises (SMEs) still have the theoretical potential to fill gaps left by more cautious national housebuilders. But access to finance is tight and the competition for land remains strong.
