To the relief of the housing industry, Rachel Reeves used her Spring Statement to defend her record on economic stability rather than introduce any new measures.

According to Reeves, the Government has the right economic plan. She says inflation, borrowing and debt interest are all falling while living standards and GDP per head are rising and insists that easing inflation is central to reducing pressure on households and the cost of living.

Figures from the Office for Budget Responsibility (OBR) that were released to coincide with the statement predict inflation will fall from 3.4% in 2025 to 2.3% in 2026, returning to the 2% target in late 2026 – earlier than forecast in November.

Growth, though, was downgraded for 2026 to 1.1% from 1.3%, and unemployment is expected to peak at 5.3% this year. Borrowing, on the other hand, is forecast to be nearly £18bn lower than predicted, and Reeves’ fiscal headroom has increased from £21.7bn to almost £24bn.

SIGNIFICANT IMPACT

However, the OBR points out that its forecasts were finalised as the conflict with Iran was escalating and warns that the situation in the Middle East could have “very significant impacts on the global and UK economies”.

As a result of the conflict, UK wholesale gas prices have surged amid threats to shipping and attacks on production facilities, increasing the risk of higher inflation and adding renewed pressure on the cost of living. Government bond yields and swap rates are also now on the rise, and they, in turn, could push up mortgage costs.

The Opposition, as you would expect, refuted Reeves’ claims, with Shadow Chancellor Mel Stride comparing her to a “dodgy estate agent” standing in a wreck of a building trying to convince people to “look at the potential.”

INDUSTRY REACTS

Colleen Babcock, Head of Partner Marketing, Rightmove

“After the long build‑up to November’s Autumn Budget, which was full of near‑daily rumours about tax and policy changes, it’s been reassuring to see a much calmer run‑up to today’s Spring Forecast. It was always expected to be lower‑key, and the lack of headline‑grabbing announcements should help give movers more confidence and certainty right now.

“Looking ahead to the Autumn Budget, which is the government’s big opportunity for policy change this year, we’d really like to see stamp duty properly looked at. The current bandings haven’t kept up with house prices, and as a result, less than half of homes in England are now stamp‑duty free to first-time buyers, falling to just one in ten homes in higher‑priced regions like London. For most movers, the tax is unavoidable, and it can be a real deterrent, particularly for those at the top of chains considering a downsized move.

“With around seven or eight months to go until the Autumn Budget, there’s time for the government to give some serious thought about how the system could be improved. That could mean a more regionalised approach, higher zero‑rate thresholds, spreading payments over a longer period, or even scrapping stamp duty altogether. In its current form, stamp duty remains a major barrier to movement, which isn’t good for would-be buyers and sellers, or for the wider economy.”

Jason Tebb, President of OnTheMarket: 

“Today’s Spring Budget was as low‑key as many of us were hoping for.

“After the turbulence surrounding the Autumn Budget, a continued period of clarity and certainty is now what the market needs more than ever.

“This is certainly a step in the right direction to restoring a sense of stability and rebuilding the confidence among buyers and sellers that drives market momentum.”

Credit: Simon Cairnes - The Negotiator