Comment on Today’s Spending Review
Andy Jones, Group Director of Corporate Sales, Lettings & BTR at LRG:
While the considerably increased funding for affordable housing is welcomed and will help provide a boost to new homes and affordable housing development, from a property investment perspective I feel that the Chancellor has missed an opportunity to tackle the development viability crisis which is another important part of the jigsaw. Without urgent intervention to tackle the real-world constraints choking housing delivery, particularly in Build to Rent (BTR) and regen schemes, government ambitions will remain out of reach.
Despite rhetoric around growth, there is still no clear recognition that many housing developments that were viable just five years ago are now stalled. Interest rates, stubbornly high construction costs, highlighted in the BCIS cost index for continued inflation in core construction costs and a plethora of new taxes and regulatory hurdles (specifically new building safety regulations) have combined to choke viability, especially in areas with lower land values. High-density schemes and regeneration projects, which are so often essential to delivering housing targets, have been hit hardest.
We cannot talk seriously about unlocking housing or reviving growth without confronting this reality.
That requires the government to take bold action to reduce upfront costs, provide greater certainty over tax and regulation and speed up the planning and infrastructure that underpins delivery. The industry is desperately in need of measures to address mounting delays from the Building Safety Regulator and the under-resourcing of planning departments. These are real-world bottlenecks which investors face every day, and which the government could relieve immediately with the right focus.
The industry will continue to lobby for the return of Multiple Dwellings Relief for Build to Rent, which is particularly necessary in lower value areas where it supported regeneration and housing delivery. Its abolition has made viable schemes unviable – and no serious plan to support rental delivery can ignore that fact. There is quantitative analysis showing reduced viability of Build to Rent projects post MDR abolition.
We welcome the Government’s stated commitment to tax certainty – but it must go further. Build to Rent and modular housing (MMC), for instance, need clearer VAT treatment and better support to achieve scale. And across the board, we need fewer, not more, untested levies and obligations at the start of the development process. NHBC foundation research shows slow uptake of MMC partly due to tax and regulatory uncertainty.
If we are to meet housing targets, regenerate brownfield land, and drive real economic growth, viability can no longer be the elephant in the room. The property industry stands ready to deliver – but only if Government is prepared to work with us on the fundamentals.
Sarah Thompson, Managing Director, Mortgage Scout part of LRG.
“It was easy to miss, but today’s Government Spending Review quietly confirmed that the Mortgage Guarantee Scheme will be made permanent. There was no formal announcement and no further details, and with the current scheme ending on 30 June, buyers are left waiting until July to understand exactly what will change.
“The scheme allows lenders to offer 95% loan-to-value mortgages by providing a government guarantee on the portion between 80 and 95%. In practical terms, that gives buyers the chance to purchase with just a 5% deposit. With high rents and rising living costs making it harder to save, this kind of support is critical for those trying to move from renting to owning. However, the current scheme excludes new-build homes, which is a key issue for many first-time buyers. If the government wants to improve access, it should look at widening the scope of the scheme and making it more inclusive.
“Although mortgage rates are now starting to fall, the size of the deposit remains the biggest challenge for most buyers. A permanent guarantee scheme could bring much-needed consistency to the market and give both lenders and borrowers greater confidence. We will be watching closely for the details in July, but the signal from the government is clear: helping buyers with smaller deposits is back on the agenda.”
You May Also Enjoy
Applicant budgets remain stable and rental prices in line with historic norms
The Impact of Increasing Lease Conversions on Estate Agents in 2026
First-time buyers help drive the most home moves for three years
Mortgage Lending Statistics – December 2025
Bank of England interest rates decision – Thoughts from the Industry
