Henry Scott, Partner at StephensonsRural, reflects on the Chancellor’s latest Spring Forecast and what a subdued fiscal update means for mortgage affordability, housing supply and the long-term outlook for UK property.

PHEW…Chancellor Rachel Reeves delivered a measured Spring Forecast on 3 March 2026, opting for a 'keep calm and carry on' stance that prioritised economic stability over radical new interventions.  

Amid geopolitical uncertainty, the statement focused on the long-term impact of previously announced planning reforms and the gradual easing of mortgage costs rather than immediate fiscal triggers.

Mortgages and affordability: A narrative of gradual easing

The centrepiece of the Chancellor’s housing remarks was the claim that successive interest rate cuts have saved households an average of £1,300 per year on a typical new fixed-rate mortgage since the government took office.

• Rate Trends: Mortgage rates are expected to stabilise near 4% as the Bank of England base rate continues its downward trend toward an estimated 3.25% by late 2026.
• Living Standards: The Treasury highlighted that falling inflation and lower borrowing costs are expected to make households roughly £1,000 better off on average, providing much-needed support for homebuyer confidence

OBR Forecasts: The housing market outlook (2026 to 2030)

The Office for Budget Responsibility (OBR) updated its projections, painting a picture of a market in 'recalibration mode':

• House Prices: Predicted to rise by 2.4% to 2.9% annually through 2030, keeping growth broadly in line with average income increases.
• Supply Challenges: Net additions to housing stock are projected to dip to a low of 220,000 in the 2026–27 cycle due to previously subdued construction starts.
• Long-term Recovery: Supply is expected to accelerate sharply toward the end of the decade, reaching over 305,000 annual completions by 2030–31 as the impact of planning reforms begins to manifest.

Strategic reforms and sector reaction

While the statement was 'low-key', it reaffirmed several critical pillars of the government’s long-term housing strategy:

• Planning Efficiency: The Chancellor doubled down on plans to "scrap pointless" planning checks, a move the Treasury estimates could save firms £6 billion and expedite the delivery of up to 1.5 million homes over this Parliament.
• Affordable Housing: A commitment to increasing affordable housing capacity was reiterated, supported by the ongoing preferential borrowing rate for council housebuilding through the Public Works Loan Board (PWLB).
• Construction Skills: To address labour shortages, a £625 million construction skills package was confirmed, aiming to bring 60,000 additional workers into the industry.

In summary, this will be looked upon as a subdued Spring Statement, which is understandable given the current geopolitical turbulence and their short to medium term impact on the economy.

However, such uncertainty in the wider world can only reinforce the position that land and property in the UK remains a key asset base which, if looked after properly and taking the appropriate professional advice, can provide a safe and secure return on investment.

Get in touch with Henry for advice on professional valuation; property sales, management and auctions.