Spring Statement Reaction: National Federation of Builders
The Chancellor, Rachel Reeves MP, used her Spring Forecast 2026 to highlight that lower borrowing, falling inflation and economic growth shows the Government’s economic plan is working.
James Butcher, Deputy Chief Executive of the National Federation of Builders (NFB), said: “The Government is consulting on reforms to planning which would speed up the construction of new homes and infrastructure as well as retrofitting. It therefore makes sense not to use the Spring Statement to announce funding for social housing, retrofitting at scale and capital projects. However, it does put pressure on the Autumn Budget to realise the benefits of these reforms and make the fiscal headroom count.”
The Office for Budget Responsibility’s (OBR) economic and fiscal outlook highlighted a downgrade in growth and a forecast of employment peaking at 5.3%, with CPI inflation falling to 2.1%. House price inflation is expected to average 2.5%, with average effective interest rates on existing mortgages to rise from 4.1% in 2026 to 4.5% on average over the rest of the forecast period.
New housing is expected to drop by 40,000 compared to the 2020’s but rise to 305,000 by 2030/31.
Rico Wojtulewicz, Director of Policy and Market Insight at the NFB, said: “The Government was handed a poisoned chalice with planning because the previous government created a bureaucratic quagmire aligning with NIMBY sentiment. Much of that has been unpicked, but because it takes time for laws to be made and projects to benefit from changes, 300,000 homes a year by 2030 is realistic but means that the 1.5 million new home commitment is unlikely to be met.
“To help ramp up housebuilding and construction capacity, we hope the Autumn budget will be used to increase market confidence through a new Help to Buy scheme, to pump-prime key infrastructure projects, to ensure unspent planning contributions are spent or returned, to let Homes England off the leash, and to find ways to help SME housebuilders and regional contractors in both procurement and planning.”
