Average rates on existing mortgages are expected to rise from 4.1% this year to 4.5% by 2030, the government revealed in the Spring Statement.
In a low-key statement, Chancellor Rachel Reeves revealed that the OBR has downgraded expected economic growth to 1.1%, down from 1.4% in November’s Budget. They should then rebound to 1.5% and 1.6% in 2027 and 2028.
The statement was devoid of any tax or spending changes.
Nathan Emerson, chief executive of Propertymark, said: “Today’s Spring Statement underscores the ongoing pressures in the UK housing market, particularly around affordability for renters and first-time buyers.
“While it does not introduce major new housing policies, the focus on supporting economic stability and the commitment to implement planning reforms by the end of the year are welcome steps.
“As the Autumn Budget approaches, the UK government has the opportunity to implement policies that make a real difference.
“Revising Stamp Duty thresholds and supporting investment in the private rented sector would improve market efficiency, increase housing supply, and address affordability challenges for both renters and buyers.”
UK housebuilding is going backwards in the short-term, falling from 260,000 per year in the early 2020s to 220,000 by 2026/27. However, it’s predicted to rise to 305,000 per year 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.”
