Rachel Reeves’s first full Budget as Chancellor was always going to be a test of political intent as much as fiscal arithmetic. The UK housing and property markets sit at the intersection of both. They are a barometer of household confidence, a foundation for local growth, and, increasingly, a tempting target for revenue. On Lauder Teacher’s recent Louder Teach In, Jamie Ratcliff, co founder of Place Base and deputy chair of The Housing Forum, offered a sharp, market rooted take on what the Budget does, and does not, mean for housing supply, affordability, and investment.
Ratcliff’s starting point was not triumph or despair, but uncertainty. This was, in his words, the most heavily briefed Budget he can remember, and yet it still managed to create fresh ambiguity in the market. His cricket analogy landed for good reason. The Budget did not gently roll the pitch for the next innings, it “scarified the lawn”, digging holes that leave households, developers, and investors trying to work out where they stand. That atmosphere matters because housing responds less to a single rate change or tax tweak than to the confidence that policy is predictable over time.
The headline for housing itself, however, was modestly positive. Ratcliff argued that Reeves appears to be working to the Hippocratic Oath: first, do no harm. The clearest example is what did not happen. The feared sharp increase in landfill tax, which industry warned could add tens of thousands of pounds to the cost of a new home, was avoided. In a system already burdened by layered regulation and inflated build costs, simply stepping back from another cost shock is meaningful. Ratcliff’s point was blunt: policymakers once assumed house prices would keep rising forever and soak up any new requirement. That era is over. Demand from first time buyers, owner occupiers, and investors has softened, and viability is no longer endlessly elastic.
Yet a “do no harm” Budget is not the same as a pro supply Budget. The Government may be rhetorically committed to “build, baby, build”, but Ratcliff was clear that ambition will not deliver itself. The Budget arrives after a planning reform push and a sizeable affordable housing settlement at the spending review. In that context, he judged it unrealistic to expect another immediate surge of housing specific measures. But he also warned that supply needs more than helpful preconditions. If Government wants to reach its headline targets, it will have to keep widening the aperture of what is viable to build, and where.
This tension was most obvious in the Government’s approach to housing taxation. No stamp duty reform again, and a future high value council tax surcharge that has already been branded a mansion tax. For Ratcliff, the missed opportunity is structural. Stamp duty and council tax are both poorly designed for a modern housing system because they inhibit mobility and dull overall liquidity. He pointed to proposals to replace both with an annual property tax, which could, in theory, encourage better use of housing stock and stimulate transactions. The Budget instead leaves stamp duty intact while adding a deferred surcharge later. In effect, the market gets the friction of stamp duty and the extra cost of higher council tax, without the behavioural incentives of a clean redesign. That matters because new build delivery is tied to churn. Roughly one in ten sales are new builds today. To hit 1.5 million homes, Ratcliff noted, new builds would need to be closer to one in five transactions. Without more market liquidity, delivery ambitions look mathematically strained.
The risk is greatest in London and other high density urban markets. Colm Lauder pressed Ratcliff on the consequences of the mansion tax for areas already logging record low commencements. Ratcliff’s response was understated but pointed: it cannot help. Prime or near prime markets were already wobbling under high costs, regulatory uncertainty, and thin demand. Adding perceived barriers to purchase, even if implementation is years away, feeds through to sentiment, land values, and the willingness to start marginal schemes. Ratcliff captured the mood with a sober aside. London is struggling to attract high density investment right now, and comparative advantage against other global cities is not a strategy.
If the prime sales market looks fragile, the rental market looks politically conflicted. The Budget includes a proposed two percentage point rise in tax on rental income. Ratcliff sees this as another nudge against becoming a landlord in the UK, at precisely the moment small landlords are already exiting. He also expects institutional investors to reprice accordingly, particularly in high density build to rent where net yields already struggle to compete with the returns available on government debt. In practice, this steers capital towards lower density regional formats, especially houses, where construction is simpler and operational risk is lighter. The danger is that policy inadvertently reinforces the very geographic and typological skew that planning frameworks have been trying to correct.
There is, too, an inflationary shadow. The Office for Budget Responsibility expects tax rises on landlords to pass into rents. Ratcliff thinks the reality could be worse. A shrinking landlord base reduces supply, and the Renters’ Rights framework may push asking rents higher as landlords and agents seek room to negotiate down. Even if headline rent inflation lands around two percent, the political optics are awkward. A tax on landlords reads, to tenants, like a tax on their monthly bill.
On delivery, Ratcliff returned repeatedly to regulation, especially building safety. The second staircase requirement and the Gateway 2 approvals regime are already pushing developers to reduce heights and lose units across multiple cities, not just London. He is currently quantifying that impact, and expects it to be substantial. Gateway 2 delays of around 18 months deepen viability pressures for higher density schemes through sheer cost of carry. His plea was pragmatic rather than ideological: fast track existing building applications to clear the backlog, and free capacity for new supply.
The bright spot, such as it is, sits in affordable housing. Ratcliff believes the spending review settlement should bring housing associations back into a more active building role, after years of focusing on existing stock. He also highlighted a niche but useful Budget measure on VAT treatment for social housing schemes, which should improve cash flow for builders and marginally reduce costs without burdening the Exchequer. In a landscape short of easy wins, these small positives matter.
If there was an overarching conclusion from the call, it was this; the Budget keeps housing from falling off a further viability cliff, but it does not yet build a bridge to the Government’s delivery ambition. It stabilises at the margin, while leaving structural constraints untouched. In that sense, Ratcliff’s scarified lawn image is apt. The field has been disturbed, the long term shape is unclear, and the sector is left to play on uneven ground. The policy direction might still become coherent, but for now the market will do what markets do in uncertainty: pause, reprice, and wait for firmer signals.
A recording of the session is available to view on our website: See below or a direct link to Watch here.
