By Terry Woodley, managing director of development finance at Shawbrook
Despite the chancellor’s recent appointment of an infrastructure and planning adviser and the housing secretary’s announcement of a ‘default yes’ for developments near train stations, housebuilding was the elephant in the room at the Autumn Budget. The lack of announcements was a missed opportunity for the government to address critical issues currently facing developers, namely around talent, planning red tape and first-time buyers. Given the difficult economic conditions experienced throughout 2025 and the similar outlook for 2026, this oversight has generated considerable disappointment within the industry.
Talent and recruitment
While the government did announce a commitment to recruit 100,000 more construction workers per year by the end of the Parliament, there hasn’t been a notable shift in the sector five months on. So much so, that our research found that a quarter (23%) of mid-size developers wanted to see the government offer support with hiring talent and training younger workers at the Budget.
Of course, it may still be too early to see the impact of the promised measure. And it likely hasn’t helped that during this year there was a lack of demand around housebuilding, leading construction bosses to hold back on hiring new talent. However, without further government support, this trend could easily continue into the first half of 2026.
Positively, the government did confirm £48million towards funding local planning departments. While this investment is a crucial long-term step, especially following the Royal Town Planning Institute’s warnings that a fifth of planners intend to leave or retire in the next three years, it does little to address the immediate challenge. Attention is now focused on how to quickly bolster planning teams, given the time it takes to master those positions. It may be a while before we see the sector really start to benefit from this financial boost.
Planning red tape and infrastructure
One of the biggest challenges around housebuilding lies in the complexities of the planning system. A fifth (20%) of mid-sized builders said they wanted to see the government announce a reduction in regulation and red tape at the Autumn Budget, but despite it being so widely called for, this didn’t materialise.
The Planning and Infrastructure Bill, which has yet to receive Royal Assent, should theoretically address some of these issues. Key facets of the Bill, like planning committees, development corporations and strategic planning elements, should reduce red tape and streamline processes. The hope is that the new appointment of Catherine Howardas infrastructure and
planning adviser should also ‘Get Britain building’, though it’s unlikely that we will see this happen before the New Year.
First-time buyers and Help to Buy
The government has continued to talk about their big plans for housebuilding but has missed an opportunity by not supporting first-time buyers. First-time buyers make up a significant portion of the property market, but it’s been a challenging few years for the cohort due to high inflation, interest rates and house prices, the sales market risks stagnation.
It’s true that first-time buyer incentives can have negative aspects like inflated house prices; but it’s clear that something is needed to better support these essential parts of the housing market and, in turn, developers. Members of the industry have called for a return or a revision of the Help to Buy scheme, which ended in 2023, as it provided both demand and activity for new properties, but so far, government responses have been a little lacklustre.
Altogether, this Budget was sorely lacking in reforms and reassurances for property developers; there are green shoots which could come to fruition next year. If the government wants to truly embody its ‘build, baby, build’ call to arms, then prioritising developers’ needs will need to be top of the list; otherwise, the construction sector could be in for another difficult year.
