Autumn Budget: government backs housing as new data point to weaker delivery and demand

The government’s Autumn Budget delivered further support for housebuilding but the latest data on supply and mortgage approvals highlight the scale of the challenge facing the sector.

Alongside the Budget, the Office for Budget Responsibility (OBR) downgraded its outlook for housing delivery, forecasting 190,000 fewer net additions to the UK housing stock over the forecast period than it expected in March⁽¹⁾. It now forecasts annual net additions to fall from around 230,000 in 2025-26 to 220,000 in 2026-27, before increasing to 260,000 by 2030-31. The OBR attributed the weaker outlook to wider pressures in the construction industry, including weak demand, rising materials costs and the impact of other regulatory changes. It maintains that the 2024 planning reforms will have a positive impact on housebuilding.

The latest official data reinforce the difficult market conditions. Figures published by the Ministry of Housing, Communities and Local Government show that around 46,000 Energy Performance Certificates (EPCs) were lodged for new dwellings in England between July and September 2026, a 4% fall compared with the same period last year. Six of England’s nine regions recorded annual declines, with the largest falls in Yorkshire and the Humber (-19%), the West Midlands (-15%) and the East of England (-9%). Although EPC lodgements for new dwellings increased by 1% to around 199,000 in the 12 months to September 2026, the latest quarterly decline suggests housing delivery is yet to build the sustained momentum needed to meet the government’s ambitions.

Demand also remains under pressure. There were 53,400 net mortgage approvals for house purchases in the UK in September 2026, below an average of around 58,800 over the previous six months⁽²⁾.

Against this backdrop, the Chancellor’s Autumn Budget included an additional £1.5 billion for the Social and Affordable Homes Programme, intended to support the delivery of around 10,000 homes in England. The government also announced £4.7 billion for its new Your First Home scheme, offering equity loans to approximately 70,000 eligible first-time buyers purchasing new-build homes from April 2027.

In addition to funding, the government also committed to an exemption from biodiversity net gain (BNG) requirements for residential brownfield developments of up to 1.5 hectares, a zero rate of VAT on land sold to registered social housing providers, and an extension of preferential borrowing rates for council housebuilding. The government confirmed no further major changes to Building Regulations will be introduced for the remainder of this Parliament, except those relating to building safety, while committing to consider a more proportionate approach to regulation.

Dr David Crosthwaite, chief economist at BCIS, described the measures as a positive starting point, suggesting the government was responding to concerns raised by private developers. However, he added that questions remain over how far or how quickly the changes would go in addressing the wider challenges facing housebuilding.

‘Even if the government has quietly moved away from its target of delivering 1.5 million homes, private developers remain critical to housing supply and provide vital demand for domestic manufacturers already feeling the squeeze,’ he said. ‘The Your First Home scheme and exemption from biodiversity net gain requirements for certain residential brownfield sites are welcome. But greater clarity over future rules is not the same as reducing the cumulative cost of development. Continued pressure on private housebuilding has consequences well beyond the sector, affecting affordable housing delivery, manufacturing output and growth in local economies.’

Industry reaction to the Budget’s housing measures has been mixed. While the Your First Home scheme has been broadly welcomed, its introduction in April 2027 has raised concerns about the lack of immediate support for demand. In its 3Q2026 trading update, Ibstock described the scheme as a potentially meaningful intervention that could improve affordability and stimulate demand for new-build homes, but expressed disappointment at its delayed introduction, warning that this was adding pressure to near-term demand⁽³⁾. The OBR also anticipates that the scheme will have only a marginal impact on overall housing supply, reflecting its relatively limited scale.

The Home Builders Federation (HBF) welcomed the support for first-time buyers but said further details were needed before its likely impact could be assessed. While recognising efforts to ease the regulatory and policy costs of housebuilding, HBF’s chief executive cautioned that the proposed BNG exemption would have a limited impact, benefiting a relatively small number of urban sites.

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^{(1) GOV.UK – Economic and fiscal outlook – October 2026 – here}

^{(2) Bank of England – Money and Credit – September 2026 – here}

^{(3) London Stock Exchange – Q3 Trading Update – here}