Spring Statement 2026: Reaction
March 2026
While no major housing announcements were expected as part of the Spring Statement, the stability that comes with that is welcome after a tumultuous Autumn Budget. However, the market still needs reassurance, as confidence among buyers and sellers is only just beginning to recover after a volatile period.
In this overview, we’ll touch on the key economic forecasts and trends highlighted by the Chancellor, and unpack what these could mean for buyers, renters, and landlords in London’s property market.
Inflation and Mortgage Costs
The Chancellor highlighted continued easing of inflation, projected to average 2.3 % in 2026 and reach the Bank of England’s 2 % target by 2027. While these forecasts support expectations of potential interest rate stability, with gradual reductions over time, global factors, including energy markets and geopolitical tensions, could influence the pace of any changes.
What this means for mortgages and buyers
- Easing inflation and the prospect of lower interest rates supports expectations of lower or stable borrowing costs for buyers, though mortgage rates will continue to be influenced by broader economic developments
- Buyers with larger mortgages - common in London - may benefit more from even small reductions in rates
- Improved borrowing conditions may encourage stronger engagement from first‑time buyers
Economic Growth and GDP
The Office for Budget Responsibility (OBR) forecasts modest GDP growth of 1.1 % this year, rising to 1.6 % in 2027.
What this means for buyers and investors
- Slower growth this year may temper buyer confidence, particularly in central London
- Suburban and commuter areas may remain more attractive to buyers seeking stability
- Overall, a predictable growth outlook provides a foundation for long-term market planning
Employment and Youth Prospects
Although no new figures were released in the Spring Statement, the OBR expects the UK unemployment rate to reach about 5.3 % in 2026, before falling again in subsequent years. The Chancellor also highlighted challenges for young people entering the labour market, with employment prospects weaker than average. Although no new apprenticeship or training programmes were announced in the Spring Statement, the Government signalled that support for youth employment will be a priority in coming months.
What this means for buyers and renters
- Confidence among younger buyers and renters is closely tied to job security and earnings potential
- Improving opportunities for young people will help sustain first‑time buyer activity and maintain rental demand
- The rental market may continue to see strong demand for flexible, affordable options among younger households
- Higher unemployment this year could make central London properties less appealing for first-time buyers, while more affordable commuter areas may see sustained interest
Supply and Regulation
Many commentators and industry stakeholders had hoped the Spring Statement would include stronger measures to address the UK’s persistent housing shortage, particularly given forecasts that the government is on track to miss its target to build 1.5 million new homes by the end of this Parliament. Instead, the Spring Statement underscored broader fiscal discipline and economic resilience as key government priorities.
What this means for landlords and investors
- Supply challenges in London remain unchanged
- Regulatory clarity is essential for landlord confidence and long-term investment
Looking Ahead
While the Spring Statement offered stability, many had hoped for more targeted measures to support the housing market. In particular, initiatives aimed at helping first-time buyers - such as adjustments to Stamp Duty thresholds, expanded shared ownership options, or targeted help-to-buy schemes - would have been welcome. Similarly, clearer guidance on rental regulation and incentives for landlords could help maintain confidence and encourage ongoing investment in rental supply.As the year progresses, the government has an opportunity to introduce measures that address both affordability and supply challenges. Actions that reduce upfront costs for first-time buyers, alongside reforms that provide regulatory certainty for landlords, could strengthen market confidence, support demand, and help ensure the housing market remains stable and resilient.
Whether you’re buying, selling, letting, or investing in London property in 2026, the right guidance makes all the difference. Get in touch with our team for hands-on, local advice tailored to your goals and circumstances. Call 020 8563 0202 or fill out our enquiry form.
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