Chancellor Rachel Reeves revealed her Spring Statement on 3 March 2026. There were no real fireworks in this statement, and the underlying theme was one of stability. Unlike a full Budget, the Spring Statement typically focuses on forecasts and fiscal outlook rather than introducing major policy changes.
The headlines from a property point of view were:
- Mortgage rates: Average interest rates on existing mortgages are predicted to rise from 4.1% this year to 4.5% by 2030.
- New homes: UK housebuilding is set to fall from an average of 260,000 a year in the early 2020s to 220,000 in 2026/27, before rising to 305,000 a year by 2030/31.
Let’s have a look at what each of those issues will mean for the UK property market in a little more detail.
Mortgage rates
While there is a rise in interest rates predicted, that rise is lower than was estimated at the Budget. That’s a reflection on the fact that inflation is on a downward trend. In fact, Rachel Reeves said that inflation is expected to fall towards 2%.
That means that it’s possible that we might see cheaper borrowing rates soon. For example, a typical two-year fixed mortgage could cost over £1,300 less per year than similar deals in 2024.
However, the turbulence in the Middle East could put pay to that. Inflation could be set to rise again with the volatility in energy prices.
Housebuilding
As you may already know, Labour pledged to deliver 1.5 million new homes by no later than August 2029 (the end of their 5 year parliament). That’s an average of 300,000 new homes a year.
Figures announced in the Spring Statement suggest that this target will be missed. However, Labour are keen to stress that annual progress against the target will not be even, and the rate of production could ramp up towards the end of their term.
That assumption is partly based on Labour’s intention to remove blockages in the planning system. However, it appears that their planning reforms so far have not been a quick fix.
Reactions to the Spring Statement
The Spring Statement has largely been received as a bit of a damp squib. Some people say that it lacked ambition and others called it a holding exercise. What’s clear is that the government is prioritising economic stability rather than unveiling new tax measures or housing reforms at the moment.
Nevertheless more investment is needed in the housing market. It is still difficult to get on the housing ladder and rent remains high, which makes it even more difficult to save.
Changes that the Chancellor could have made to make things easier would include:
- New tax rules for landlords and reforms to buy-to-let taxation
- New first-time buyer schemes
- Changes to Stamp Duty to encourage people to move house
Upcoming reforms to Stamp Duty?
While no changes were announced in the Spring Statement, there is widespread speculation within the property section that reforms to Stamp Duty are inevitable.
Kemi Badenoch announced plans to abolish Stamp Duty in her speech at the Conservative Party Conference in October 2025. While that is just a pledge at this stage, it indicates what’s on the political agenda, and a general direction of travel.
The current system discourages mobility and limits access to the market for first-time buyers. Potential reforms could include:
- Higher zero-rate thresholds
- Regionalised tax bands
- Spreading Stamp Duty payments over time
- Abolishing the tax entirely
These issues are expected to re-emerge ahead of the Autumn Budget.
In summary
The 2026 Spring Statement was deliberately cautious. Rather than introducing new housing policies, Rachel Reeves focused on reinforcing economic stability and allowing previous reforms to take effect.
For the property market, this means:
- No immediate policy shocks
- Gradual house price growth
- Potential mortgage affordability improvements
- Continued uncertainty around future tax reforms
While the statement may have disappointed those hoping for bold housing reforms, it signals a period of policy stability.