Mar
2025
Spring Statement: Experts respond
DIY Investor
26 March 2025
Hamish Martin, Partner at LAVA Advisory Partners, said: “The Chancellor was true to her word that today’s announcement would be more of an economic update than delivering a raft of tax reforms or spending commitments. For businesses, hopes of u-turns on previously-announced policies such as National Insurance hikes did not materialise, meaning no relief for the escalating costs that are creating headaches for many of the UK’s 5.5 million SMEs.
“To help bolster public spending in the future, and to allow for greater defence spending, the Chancellor made clear her focus on scything government running costs. With a plan to reduce those costs by 15% by the end of this Parliament, it will be interesting to see if professional services firms are called upon to help the government restructure departments and deliver efficiency gains – there could be some major opportunities for consultancy firms if so.
“More broadly, the challenging economic landscape for SMEs – higher inflation, wages and borrowing costs – points towards a potential spike in M&A activity. The extremely modest forecasts for the UK economy could make life challenging for small companies, in turn opening the door to more consolidation across various industries. Whether it’s private equity firms seeking new opportunities to inject capital they’ve raised and need to deploy, or larger firms targeting smaller competitors to acquire particular skills, IP or specialisms, we should expect players with stronger finances and bolder ambitions to remain active through M&A activity while others focus on survival.”
Spring Statement – Pensions Expert Reaction
Lily Megson, Policy Director at My Pension Expert, said, “This Spring Statement reflects a difficult economic climate – now more than ever Government must do more to protect the most vulnerable in society and offer much-needed reassurance to savers.
“In such challenging times, decisive action is needed. Providing a clear timeline for the second stage of the pension review, for example, would have been a positive step. The Government must not lose sight of longer-term ambitions, particularly when it comes to the pension system.
“We hope to see the Government reaffirm its commitment to driving better outcomes for savers, and engaging with the industry to drive this forward. In doing so, sustainable change will be achieved, with more savers feeling supported to achieve the financial future they want.”
Two mortgage CEOs react to Spring Statement – what does it mean for property and mortgage market
Paresh Raja, CEO of Market Financial Solutions, said: “Overturning outdated parts of government to improve efficiency has been a major focus for Labour since the election, and planning reform was raised again as a key part of this agenda. However, the “get Britain building” rhetoric must now translate into tangible action – bringing in new construction workers is a positive step, as the Chancellor had already announced three days ago, but much of today’s speech involved repeating the Autumn Budget’s plans to encourage housebuilding.
“Reforming the planning system is obviously important. However, investors and developers are unlikely to commit to new projects unless they see a strong and growing economy that provides long-term confidence and a return on their investment. The OBR forecasts were a blow in this regard, and the onus must now be on turning the corner to turbo-charge GDP growth.
“House prices are rising, inflation fell in February, and the base rate is expected to come down further this year. These are all positives, highlighting that the property market remains bouyant, and this is important given how significant the sector’s contribution to GDP is. In future statements and budgets, we need the Chancellor to focus more energy on supporting homebuyers and borrowers, which will further stimulate growth in the market.”
Tim Parkes, CEO of RAW Capital Partners, said: “It might not have the standing of the Autumn Budget, but the Spring Statement was an opportunity for the government to set out a bold vision for growth nonetheless. However, today’s speech highlighted that there remains a keen focus on fixing legacy issues, both with the state of the economic and within the property sector, most notably where housebuilding is concerned. This is, of course, important. But the UK also needs a more proactive and forward-thinking strategy to meaningfully encourage economic growth.
“Creating the right conditions for investment should therefore be the government’s top priority if it hopes to attract both domestic and international capital. This means not just stabilising the economy and filling the fiscal blackhole, but fostering an environment where businesses and investors feel confident to commit to the UK for the long term.
“But the government can’t do it all on its own, so specialist lenders have a key role to play in facilitating overseas investment into UK property and contributing to a growing economy. By offering a tailored approach to lending and bespoke financial products, they can help international investors navigate the market with greater confidence, while reinforcing the UK’s position as a prime destination for investment.”
Ben Thompson, Deputy CEO, Mortgage Advice Bureau, on how the Spring Statement will impact prospective and current homeowners:
“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.
“The focus now must shift towards more direction and innovation from regulators and lenders to support a larger pool of borrowers and open up the housing market. Responsible lending proposals to consider relaxing affordability criteria and LTI caps, and the development of mortgage products that focus on rental track records are just some of the options that would be welcomed with open arms, making homeownership more accessible and affordable.
“We’ve also long campaigned that those who buy or retrofit their homes to a higher EPC rating should be rewarded. This is alongside pushing for more concrete investment to encourage retrofitting 29 million of UK homes. We believe this can be achieved through offering a Stamp Duty refund to those who buy and then retrofit to an EPC rating of C or above, and we hope this will be reconsidered by the government in the future.”
Felicity Barnett, Lender Operations Manager, Mortgage Advice Bureau, on the Spring Statement’s impact on the new homes industry:
“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.
“In the context of rising rents, house prices, and the cost-of-living, demand for more affordable housing has never been greater – especially in a post Help-to-Buy world. Following these latest announcements, more innovation from lenders is needed. Rather than rinsing and repeating old products, we need to apply outside of the box thinking to enact real change. Focus must shift to how we can open up the contracting market, as opposed to increasing share.
“More emphasis needs to be placed on the first time buyer market. As an industry, we must now work as a collective to lower the current average first time buyer age of 35+, providing those in their twenties with more accessible, affordable options to get on the property ladder.
“In particular, there needs to be a marked shift in boosting the number of renters transitioning to become first time buyers. These are prospective homeowners who are currently trapped by strict affordability criteria. For starters, more could be done at government level to fully realise Shared Ownership’s true potential, but this still won’t be enough on its own to achieve housebuilding targets. We’ll wait with bated breath to see how the FCA’s proposals to relax mortgage lending rules develop in the next few months.”
Response to the Spring Statement
Michael Cook, Chief Executive Officer of Leaders Romans Group
Given the challenge of making £15 billion worth of cuts to public spending, today’s Spring Statement was never going deliver everything on the property industry’s wishlist.
That said, two significant pieces of good news stand out amongst some otherwise depressing statistics. And this goes to show the faith that the government has its our sector to deliver much needed growth.
Affordable Homes Programme
The first is the £2bn top-up for the Affordable Homes Programme which will provide up to 18,000 new social and affordable homes. Since council housing effectively ceased four decades ago, the private rented sector has fulfilled an important role in preventing homelessness. Today, with demand for rental properties outpacing supply, it’s good to see the government helping to address this need.
However, it seems a missed opportunity that the government rarely addresses social housing in its broadest sense – homes for sale as well as for rent. At very little cost to the taxpayer, the government could do much more to champion shared ownership as an affordable and practical way of addressing this country’s housing crisis and enable first time buyers to get a foot on the housing ladder. Our shared ownership division, SOWN, is busier than ever responding to unprecedented demand from would-be-homeowners and yet government announcements – everything from the Labour manifesto to the recently published Planning and Infrastructure Bill – consistently fail to mention shared ownership.
Funding for construction training
The £600m for construction training is also very welcome. But again, there is a cost-free solution to the skills shortage which has been overlooked. Again it concerns communication. The various trades and professions that make up the construction sector deserve greater respect and recognition. Tony Blair’s ‘education, education, education’ ethos which led to a significant increase in young people pursuing academic courses had its benefits. But for many it resulted in an unusable degree and a delay in starting in a profession. The answer is two-fold: more vocational degree courses to equip people with the necessary skills for the construction and property sectors; and a greater championing of the non-university route into these roles. This approach would deliver a saving to the Exchequer and a boost for the development sector.
Stamp Duty
There is undoubtedly a long-overdue need for a comprehensive reassessment of Stamp Duty. Unfortunately this may have to wait until a future spending review, but in the meantime, I would hope that the government sets about considering changes to what can be a very damaging tax – one that can cost the Treasury, rather than benefitting it, bearing in mind the unintended consequence of discouraging people to move up the property ladder.
The Renters’ Rights Bill
There’s much that needs to be changed in the Renters’ Rights Bill before it is enacted – not least the courts process, the increase in allowable arrears and the abolition of rent in advance. It’s not a fiscal consideration but it will impact considerable on costs to the government. So in the context of toady’s spending review we call on the government to consider the financial damage that the Renters’ Rights Bill will cause unless substantially amended – a potential increase in homelessness and the resultant cost to the public purse – and look at making amendments to the Bill during its final stages.
Claire Boyce, Tax Partner at leading law firm Freeths, said:
“As expected, given the significant tax changes in the October Budget and despite some rumours about ISA allowances and upcoming IHT reforms, there were no material changes to tax rules in the Spring Statement other than a promise to increase funding for HMRC to focus on tax evasion and tax fraud to bring in additional estimated revenue of £1bn. There was a focus on the controversial PIP and Universal Credit reforms and increases in spending on defence as well as the previously announced planning reforms. There is pressure on the Government as a result of the OBR halving the UK’s growth forecast so it will be interesting to see what further tax changes, we might see in the Autumn Budget given the Labour manifesto pledge not to increase tax for working people.”
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