The Autumn Budget 2025 brought a collective sigh of relief from housebuilders. While expectations were low, the outcome has largely protected homebuyers from significant tax rises, and even introduced several positive measures for the industry. Below, we explore the key Budget decisions most likely to impact housebuilders.
Prior to the Budget, there were proposals to merge the lower and standard rates of landfill tax in England. Removing the reduced rate for inert waste would have resulted in a substantial rise in disposal costs for many construction projects. According to the Home Builders Federation, this could have added £15,000 to the cost of building a new home.
Housebuilders therefore welcomed the announcement that the current landfill tax bands will remain in place. The government listened to industry stakeholders who warned that the proposed changes would impose “crippling costs” and jeopardise the delivery of new homes.
The Chancellor confirmed a government investment of £48 million to increase staffing levels within local planning departments. The goal is to recruit an additional 350 planners through an expanded Pathways to Planning Graduate Scheme and a new planning careers hub. This initiative will also support the retraining of mid-career professionals to help strengthen retention.
At the same time, the Planning and Infrastructure Bill continues its passage through Parliament. The Bill aims to streamline processes, reduce red tape, and speed up planning decisions—something widely welcomed by housebuilders across the UK.
Although Chancellor Rachel Reeves announced a freeze on National Insurance for another three years from 2028, wage costs are set to rise. From April 2026:
Another challenge is the continued freeze on income tax thresholds—now extended until 2031. As wages rise while thresholds remain static, more workers will inevitably move into higher tax bands, increasing financial pressure on skilled staff. This may force employers to raise salaries further to retain talent, or risk losing experienced employees altogether.
These rising wage costs will affect smaller housebuilders the most. SMEs and their supply chains may face difficult decisions regarding staffing, recruitment, and pay. Any restructuring or collapse within the supply chain could create skills shortages and industry-wide disruption, ultimately impacting larger housebuilders as well.
One notable disappointment in the Budget was the continued absence of a new nationwide equity loan scheme to support first-time buyers. Schemes such as Help to Buy—which ended in 2023—played a significant role in stimulating the housebuilding market. Its successor, the Mortgage Guarantee Scheme, has not matched its impact or popularity.
Recent years have seen a slowdown in new home sales, particularly among SMEs. Larger housebuilders can afford to offer incentive packages, but smaller firms often cannot. This growing disparity risks widening the gap between large and small developers—at a time when the industry needs a diverse range of builders delivering high-quality homes.
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