The Budget That Missed the UK's Biggest Economic Crisis: Housing

We are in the midst of the UK's Biggest Economic Crisis: Housing, one that now underpins inequality, drives down productivity, constrains public finances and undermines generational opportunity. Yet the 2025 Budget, after months of preparation, did not meaningfully address it.

Out of a £1.4 trillion package, only around £3 billion of genuinely new housing-relevant investment was announced, most of it peripheral (planning capacity, devolved pots, defence-estate land). The major capital commitments, the £39 billion social and affordable homes programme and the National Housing Bank, were allocated months ago. Important, but not a Budget response to a crisis.

If the government truly viewed housing as the defining economic challenge of our time, it would be pulling every cross-government lever available. Instead, we saw caution where urgency is needed.

The Scale of the UK's Biggest Economic Crisis: Housing

A handful of facts illustrate the depth of the challenge:

• UK households spend more of their budget on housing than most EU or OECD countries.

• In England, 1 in 5 people now live in households spending over 40% of income on housing, the second-worst rate in Europe.

• Private renters spend around a third of disposable income on rent.

• Housing in the UK is now 44% more expensive than the OECD average.

These pressures drive inter-generational inequality. Whether a young person (and we are talking people from their mid-40s) can access homeownership increasingly depends on parental property wealth rather than income, skills or effort. That is not a sustainable foundation for a fair, mobile or productive economy.

The Missing Cross-Government Mission

Housing delivery remains trapped in a DLUHC silo, despite affecting Treasury receipts, labour markets, skills, transport, fiscal stability and national productivity. No sector delivering major national priorities, energy, defence, digital infrastructure, would be left to a single department. Yet housing delivery is.

The result: slow delivery, fragmented responsibility, and a national housing shortage now estimated in the millions.

The organisations we support are ready to deliver. But they need clarity, consistency and a policy and economic framework that accelerates building, not slows it.

Would This Budget Have Looked Different Under Angela Rayner?

It is fair to ask whether the absence of the former Deputy Prime Minister had a material effect. Rayner had been the political centre of gravity on planning reform and housing delivery. Whether more would have been included is unknowable, but the contrast between bold early rhetoric and cautious Budget choices is stark.

What a Serious Budget Would Look Like to tackle UK's Biggest Economic Crisis: Housing

If the next Budget truly treated housing as an economic mission, it would include concrete, measurable interventions such as:

1. A £5 billion, 5-year Housing Infrastructure & Brownfield Fund

Unlocking at least 500,000 homes on brownfield and complex sites (roughly £10,000 per home unlocked).

2. Time-limited 100% first-year capital allowances

For schemes delivering 200+ homes, up to £20 million per site, tied to actual delivery.

3. A £750 million, three-year “Housing Skills Accelerator”

Funding an extra 50,000–75,000 apprentices in construction, retrofit, building control and allied trades.

4. 0% employer NIC on the first £25,000 of salary for new housing-delivery roles

A three-year incentive for new roles in eligible construction and planning SIC codes.

These measures are not radical, they are the basics a serious, supply-led housing strategy requires.

Conclusion

The government talks big on housing. But talk is not supply. Until the UK treats housing as a cross-government economic mission and deploys real fiscal levers to unlock land, skills and delivery the crisis will deepen, inequality will widen, and growth will continue to stagnate.

The next Budget is an opportunity to correct course.

The country cannot afford another one like this.