By Rico Wojtulewicz, head of policy & market insight at the National Federation of Builders
An hour before Chancellor Reeves spoke, we broadly knew what the budget included because the OBR leaked their analysis. While many of us sighed with relief because it was clear that the landfill tax was not going ahead as proposed, the OBR calculations did hint that some changes were still possible.
And that ended up being the case, because although industry lobbying ended the ‘muckaway tax’ proposal, the lower rate will still rise in April 2026 from £4.05 a tonne to £8.65 a tonne. To lessen that 114% tax increase, work has already begun to lobby for reforms on the permits and planning policies which hinder organic material from being transported, stored for longer or re-used on the sites they came from.
Although the budget was not much focused on housing, construction and planning, there were some announcements which may end up benefiting the broader construction industry. A proposal to explore pathways for devolved regions to keep more of their business rates will mean more money spent on delivering new houses, commercial buildings and retrofitting. Fuel duty has been frozen, albeit only until April 2026. An extra £48million for planners has been complemented by Planning Careers Hubs. And a consultation announced to revamp VAT rules on land proposed for social housing, or as some know it. the ‘Golden Brick’.
However, there were some uncomfortable announcements, plus what wasn’t said certainly raised a few eyebrows.
If you are a decarbonising business which likes to take on apprentices then the cost of being ‘green’ rose, as EVs, excluding vans, will pay 3p per mile through an ‘eVED’. And apprentices will be paid £8 an hour, while the competence framework for their assessment is being weakened.
A lack of announcements on planning reforms has been noticed by many, some saying that the government has set out their stall. However, it is more likely that these announcements have been saved for the new housing secretary, Steve Reed, in particular another National Planning Policy Framework (NPPF) consultation in the coming weeks.
What was missing?
For housebuilders and the broader construction industry, silence on Help to Buy would have been a shock. This could be because the chancellor is waiting for interest rates to stop decreasing but with new build sales being slow, one home a month in some cases, and Registered Providers (RPs) not taking on affordable homes, the industry is approaching panic mode.
We need to keep reminding the chancellor that Help to Buy encouraged lenders to drop rates and made the Treasury £1.8billion.
Buyers are out there, and a recent House Builders Association (HBA) meeting suggested a slight pick-up in sales; therefore introducing a Stamp Duty Land Tax (SDLT) exemption on A and high B EPC new builds would have stimulated much-needed deals and permitted future projects to be planned or begun. Similarly, a SDLT rebate on existing homes getting to EPC C within two years would have helped move the market and stimulate work for the broader construction industry.
Budget changes on the compliance and enforcement for illegal working may be viewed by the government as a direct employment stimulator but reversing the 2024 Autumn Budget decision to increase NIC’s for employers was the most effective mechanism to achieve this.
The chancellor also chose not to reverse her decision on Business Relief for Inheritance Tax but has made a slight concession, as from 6 April 2026 any unused £1million allowance on the 100% business property relief will be transferable, including if the first death was before 6 April 2026.
Finally, the chancellor missed a chance to either cancel the egregious Building Safety Levy (BSL) or pause to spread the load to all industries complicit in the Grenfell report. How broad does she think the shoulders of housebuilders are?!
Stuck in the mud
The ‘muckaway tax’ might have gone away but the mud remains, and industry is stuck in it, some dying face down after 1,000 cuts from regulation and taxes, and others already gone.
The expected but not announced NPPF consultation will certainly offer a chance to make planning more certain, and NFB’s ‘Medium-size site’ definition (if not limited to one hectare) is going to help, particularly our struggling SMEs.
However, with planning fees soon to be set locally and the Future Homes Standard increasing build and grid costs, while embedding connection delays, the budget was a missed opportunity to pull some rabbits out of the hat, or at least drive them from their ‘muckaway’ burrows and help kick start the sector expected to deliver the Labour governments 1.5 million new homes manifesto promise.
