This article looks at the Chancellor of the Exchequer’s Spring Statement. Although it was largely a confirmation of existing Government policies, some elements of it could affect the property market in the weeks, months – and in some cases years – ahead.
It should take between three and four minutes to read.
This month, the Chancellor of the Exchequer Rachel Reeves issued her Spring Statement in the House of Commons. Although it wasn’t a full Budget, there were one or two announcements which will have an impact on the property market. Here, Maunder Taylor highlight six of the most relevant elements.
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1. Stable House Prices
The Chancellor’s Statement contained elements of the Office for Budget Responsibility’s own forecast economic forecasts. The OBR predicted that house prices will rise steadily, increasing by 2.4% to 2.9% annually between 2026 and 2030. This modest growth is generally considered to be in line with predicted wage growth, supporting a “balanced market”.
2. Mortgage Rates
Average interest rates on existing mortgages are predicted to rise from 4.1% this year to 4.5% by 2030, lower than the figure which was forecast in November’s Budget. This is partly down to increased Government borrowing costs, and persistent inflationary pressures, particularly in the services sector.
This has created some doubt over how quickly the Bank of England can cut the base rate. And the Chancellor said that the war in the Middle East meant the economic outlook has “become yet more uncertain”, with some lenders already limiting the deals they are offering, or they are increasing rates already.
3. Stamp Duty
The Chancellor confirmed that previous decisions regarding Stamp Duty remain in place, meaning no new relief was introduced to boost transactions, which critics believe will price some would-be first-time buyers out of the market.
4. Planning Reforms and Building Targets
The Chancellor reiterated the Government’s commitment to long-term planning reforms (namely, the Planning and Infrastructure Bill) to “get Britain building”. The Government pledged to deliver 1.5 million new homes in England by the end of this Parliament (roughly 2029). This requires building at least 300,000 homes annually.
Despite this, OBR projections indicate that net annual additions to the housing stock may dip to 220,000 in 2026–27 before recovering to 305,000 by 2030–31.
5. Tax Changes Confirmed
The Chancellor confirmed that tax on income earned from property will increase by two percentage points from April 2027, impacting landlords. Additionally, Capital Gains Tax (CGT) rates for property and other assets (already raised in 2025) will continue to apply, with key thresholds remaining frozen.
6. Rising Rent Arrears Risk
Welfare changes, including a 50% reduction in the Universal Credit health element, and a shift in the Fair Repayment Rate to 15%, may increase the risk of rent arrears for tenants, say some industry bodies, including the National Residential Landlords Association. Rising energy bills and living costs may also tighten rental household budgets.
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FAQs
Q: What is the current situation with Stamp Duty?
A: Zero rate thresholds for main residences is £125,000, with first-time homebuyer thresholds now standing at £300,000. First-Time Buyers Relief (the lower stamp duty rate) is £500,000. Those buying additional properties pay 7% stamp duty for property values from £125,001 to £250,000.
Q: What are the current CGT rates relating to property?
A: UK Capital Gains Tax (CGT) rates for individuals are 18% for basic rate taxpayers and 24% for higher/additional rate taxpayers on most assets. The annual tax-free allowance is £3,000. This will be the same in the 2026-27 tax year as it has been for the current (2025-6) year.
Q: What are the other elements of the Planning and Infrastructure Bill?
A: The Bill, which received Royal Assent in December and so is now an Act, isn’t just about the Government’s home-building target. It aims to streamline the planning process, with more decisions made directly by officers rather than councillors. Local authorities have been given additional powers to acquire land for housebuilding, and there is an emphasis on speeding up the process of building new infrastructure, such as roads and reservoirs. For more information, click here.