Rapleys 2026 Budget Comment

Your First Home:

Angus Irvine, Partner and Head of Rapleys Living, said: “Your First Home has been brewing for some time, with both national and regional housebuilders having made representations to Government about the need for meaningful support for first-time buyers and the new-build market. An injection of £4.7bn in equity loans of government backed lending is certainly a major step forwards.

The devil will inevitably be in the detail included in the red book later, but in principle this is a positive move. Quite frankly, the Government needed to do something to inject some energy back into the sector. Sales rates have slowed, viability is under pressure and housing delivery is moving in the wrong direction. Unless that trend is reversed, the Government’s housing target and aspirations are simply not achievable.

Ultimately, planning permissions and buyer assistance schemes do not themselves build houses. The test will be whether Your First Home gives more first-time buyers the chance and confidence to make that jump into home ownership, while also giving housebuilders greater confidence to turn consented sites into starts on site and increase delivery. The 20% deposit amount is half of what Help to Buy included which also helps mitigate against the feeling by some that these initiatives exacerbate rising house prices. The inclusion of the Lifetime ISA morphing into a First Time Buyer ISA which guarantees that buyers get back at least what they put into it even if the home they want costs more than the limit.

Overall, these initiatives will not solve the problem on their own, but they should help move the market in the right direction.”

Affordable Housing:

“Whilst the Budget’s extra £1bn-plus of funding for the Social and Affordable Homes Programme is undoubtedly positive, the industry, led by the NHF, was calling for an additional £5.3bn to unlock around 41,000 social homes that missed out in the first round of funding allocations but have plans in place and are ready to be built. There also remains a question mark over how the proposed devolution of powers to regional mayors and authorities will support the use of such funding.

In a more positive move, the confirmation of a zero rate of VAT on land sold to registered providers for social housing is welcome and should help with the delivery of affordable housing.

From a development perspective, it should make it easier for registered providers to acquire land directly, without having to rely on the often complicated ‘golden brick’ arrangements currently used. This should simplify transactions, reduce costs and potentially bring forward developments more quickly.

It could also put registered providers in a stronger position when competing for land, which would be welcome news for landowners looking at their disposal options.

However, we need to be realistic about what this will achieve. Development viability remains a significant challenge, particularly with construction costs, infrastructure requirements and planning delays. There is also a risk that some of the financial benefit will simply find its way into higher land values rather than additional affordable homes.

Nevertheless, anything that simplifies the development process and removes unnecessary costs is a positive step. The important thing is that the benefit translates into more homes being built rather than simply changing the economics of land transactions.

Overall, however, given the Prime Minister’s strong support for housing and ending homelessness, it’s perhaps disappointing that the Budget did not allocate more to new social and affordable homes.”

Business Rates:

Nik Moore, Head of Business Rates at Rapleys said: “For several years now Labour has been promising deep structural reform of business rates to make it a more fair and balanced form of taxation. Alongside this, Burnham’s Government has promised growth for all. The measures announced in the Budget today have thus been long awaited but, I suspect, somewhat disappointingly received. Whilst it is good news that some 70,000 properties will now escape the threshold for business rates including an alleged 50% of all restaurants and gyms, all non retail properties are excluded, and remain at a level set when the scheme was first introduced in 2017. We are still a long way from long-term and far-reaching positive reform. Whilst more tax burden is diverted onto online marketplaces and gambling, there was no mention of industrial or offices which had been widely discussed pre-budget. The question is will potential rises for these sectors appear in the small print later on in the red book? How will the balance between the big global distributors and corporates and smaller businesses with such properties be fairly proportioned? The Chancellor also announced that rates would freeze for all businesses in real terms and not follow inflation for two years. However, given the point in the cycle, rateable values for a large number of sectors have increased substantially already, meaning there are many more losers than winners – such as the Automotive industry which have seen a difficult two years but are set to pay higher taxation as a result.  Overall, this is not the support for growth that businesses, and the commercial property industry were hoping nor expecting.”

Biodiversity:

Jonathan Harper, Planning Partner at Rapleys, said: “The Government’s decision to exempt residential developments on brownfield sites of up to 1.5 hectares from Biodiversity Net Gain requirements will be welcomed by developers of qualifying sites, particularly SME housebuilders.

Removing the requirement to demonstrate a 10% increase in biodiversity value should help reduce development costs and some of the administrative burden associated with securing planning permission. The costs of meeting BNG requirements have often been higher than originally anticipated, particularly where biodiversity gains cannot be delivered on-site and developers need to purchase off-site units.

However, important details remain outstanding, including how qualifying brownfield land will be defined, when the exemption will take effect and whether it will apply to planning applications already in the system. Wider ecological protections and relevant local planning policies will also continue to apply.

Ultimately, while the change will provide some relief for qualifying developments, BNG is only one of a number of costs and challenges affecting development viability. It is therefore unlikely to make a significant difference to overall housing delivery, although it will remove one cost and administrative requirement from the planning process.”

Data Centres:

Kieran Rushe, Planning Partner at Rapleys says: “The so-called Data Centre covenant, announced today in the Budget, seeks to do almost the impossible: set in place strict criteria to protect issues such as water supplies being protected in local communities, whilst hoping to deliver critical infrastructure that will get Grid connection priority. Whilst the position is understandable and we await the detail, this feels like a ‘keep everyone happy’ measure that will be difficult to realistically oversee and deliver. Data Centres work differently to other buildings and infrastructure, and communities and, it could be argued, Local Authorities, do not fully understand their cruciality which is in fact less about AI and technology and more about underpinning the effective workings of everyday business and wider society needs. After all, Data Centres – albeit in many guises – have been around for decades. They are critical to social, health, education and finance access, not to mention the businesses and economy that they support. Perhaps the Government should invest in a better understanding and education of Data Centres rather than trying to please everyone and putting in place increasingly strict criteria in order to tick the box before delivery.”

Utilities & Infrastructure:

Jason Mound, Partner and National Head of Projects at Rapleys, says: “The development industry will welcome the additional infrastructure and planning investment announced in today’s budget. However, the real test remains whether the measures announced are sufficient to address the practical barriers currently constraining housing and employment delivery, namely utility capacity, infrastructure funding, planning resourcing and development viability. Without action on these issues, there remains a risk that delivery continues to lag behind the Government’s housing and economic growth ambitions.”

Talent:

James Porter, Partner and Head of Building Surveying at Rapleys, said: “Much has been said about the growth in the skills gap in the UK, particularly in construction and property. Given the Government’s commitment to deliver housing, to not have any tangible initiative announced in the budget towards roles in the professional built environment such as surveyors and planners, is incredibly disappointing – especially given the increasing amounts of legislation on Building Safety for example. Most of the Government focus is on trades and entry-level apprenticeships which, whilst important, have already received much support and has already started to help.  This omission is particularly concerning at a time when Universities are closing down building surveying courses across the industry despite it never being more crucial to develop the next wave of talent in this discipline. Universities will shut down courses if there isn’t demand, but demand only comes from knowing the careers that are available at the end. As such, we need education in schools at a younger age about the ability to go into construction and property and how broad these disciplines can be. For example, Building Surveying isn’t just about carrying out a survey: it requires a broad range of skills and functions that support the built environment at each stage of its lifecycle. The work is also incredibly varied and flexible but this needs communicating. Otherwise, the skills gap we have today will be exacerbated tomorrow.”