Today marked the delivery of the 2025 Spring Statement, the annual speech made by the Chancellor of the Exchequer that provides updates on the state of the UK economy and the progress made since the Autumn Budget was announced back in October 2024.
There’s plenty to unpack in this latest announcement, including updates that affect the housing sector. Whether you currently have a mortgage or are planning to apply in the next 12 months, here’s how the Spring Statement could impact you:
Meeting the 1.5m new homes target
Back in October 2024, the Chancellor pledged to support the 1.5 million home mandate, and today’s statement supported the government’s plans to achieve this target.
Felicity Barnett, Lender Operations Manager comments
“Today’s announcement that planning reforms will ensure housebuilding reaches a 40-year high, with 1.3m homes predicted to be built over the next five years, is a step in the right direction. Now, our industry must ensure we’re doing everything we can to, as Rachel Reeves highlighted, “come within touching distance” of the 1.5m target.”
“This includes more innovation from lenders and applying outside the box thinking to enact real change and offer affordable options to first time buyers looking to get on the property ladder.
“As it currently stands, the average first time buyer age is between 34 and 37 years old, and their needs are vastly different compared to first time buyers 10-15 years ago. This latest generation of first time buyers now requires three bedroom properties as a minimum, with many having growing families.
“While these customers must be supported by making more homes available at a more affordable level, we also need to think about getting more aspiring buyers currently in their twenties on the ladder sooner and reduce that average first time buyer age.”
Get Britain building again
While the Chancellor has reinforced the government’s commitment to get Britain building again, and declared that households will be £500+ a year better off on average, there was little else for aspiring first time buyers or home movers to get excited about in today’s Spring Statement.
However, in some ways, we can look at the lack of concrete updates for the housing sector as being a case of “no news is good news”, with the government confident that the current reforms in place will get them ‘within touching distance’ of the 1.5m new homes target.
There’s also a reason to be positive from an economic perspective. With three interest rate cuts since the general election, prospective and current homeowners can look ahead to more stable inflation levels over the next five years. Reeves outlined that inflation should continue to rise this year, followed by a rapid fall to 2.1% in 2026 and meeting 2% levels from 2027 onwards. This is welcome news for those looking to buy or remortgage, providing them with much-needed financial security with their monthly repayments.
How will this affect you?
With no other concrete plans outlined for the housing industry, and the removal of Stamp Duty relief still planned for 1st April 2025, there’s nothing you as a prospective or current homeowner need to do.
Outside of the Spring Statement, inflation made an unexpected drop to 2.8% today. Coupled with the Bank of England’s decision to hold the base rate at 4.5%, this is undoubtedly music to many homeowners’ ears. Rates are more or less at where they’re going to be for the foreseeable future, so you can get a much clearer picture of your affordability and what your monthly payments will look like if you’re remortgaging or looking to buy.
Kate Fuller, Business Principal, Mortgage Advice Bureau, echoes this sentiment:
“Although there wasn’t much in the Spring Statement that directly related to mortgages, it’s heartening to see that the government is looking at the practicalities of house building, as well as their planning changes, by reviewing investment in construction education. It’s also good to note the OBR forecasts on inflation and household disposable income all look positive, and should end up with people having more money in their pockets at the end of the day.
“This, coupled with the upcoming minimum wage increase, means mortgage rates are fairly stable right now. Based on today’s inflation figures, hopefully, another base rate reduction before the summer will all help people with mortgage affordability.”
To find out more about how the base rate impacts mortgage rates, check out our handy article:
The importance of mortgage advice
No two sets of financial circumstances are the same, and we recognise that the outcome of the Spring Statement will impact everyone’s budgets differently. That’s why it’s so important to speak to a mortgage adviser, who will ensure you have the right options at your disposal.
Whether you’re looking at buying your first home or are due to remortgage, an adviser will find the right deal for your needs, getting you mortgage ready and one step closer to your homeownership goals.
Sign up to our monthly newsletter
Stay up-to-date with all the latest mortgage news and homebuying tips with our monthly newsletter. Jam-packed with helpful information and advice, you'll always know what's happening in the industry and how it might affect you.
Whether you're a first time buyer or getting ready to remortgage, we're here for you with helpful tools, articles and information delivered straight to your inbox.
Related Articles
Will mortgage rates go down in 2025?
Labour pledges to create 1.5 million new homes
