The Spring Statement and what it means for Tenants and Landlords in South London
It was the day of the Spring Statement on Wednesday, and whilst we are told that these are very much not a 'Fiscal Event', there was still plenty of anticipation about what might be said and where it looks like we might all be headed.
Here is our Your Home Managed take on some of the key points from this year's Spring Statement, and how you as a tenant or landlord in the South London area might be affected when it comes to the housing market...
Cuts, Taxes and Affordability
Although the Spring Statement was very much billed as being 'not a Fiscal Event', the narrative coming from Westminster over the preceding days and weeks had paved the way for cuts to public spending.
Rachel Reeves cited that 'the world is a different place' today, as benefits cuts were ushered in, mainly affecting individuals and families receiving personal independence payments (or 'PIP's).
This looks set to impact 3.2 million families directly, and that certainly includes a vast number in South London – and as many of these may be private rented sector tenants, and in some cases landlords, there could easily be a knock-on effect from it – unless, of course, the purpose behind cutting the PIP is borne out, and those affected do manage to find their way back into work. That will remain to be seen.
The big difference in the world that Reeves didn't utter aloud, but was referring to, is that the USA now has a Trump government, and his threat of tariffs is likely to reduce GDP and treasury income (and indeed, a mere few hours later the same day, 25% tariffs on automobile imports into the USA were announced). Having previously pledged not to increase taxes on working people, it felt inevitable that public spending cuts would be on the agenda.
The government did stick to that prior pledge on taxes – there were no tax rises 'for working people' announced yesterday –, but of course employers' National Insurance does go up in April, as announced in October's Budget address.
It is inevitable that the added burden on employers will be felt by employees, manifesting itself in reduced hours, delayed pay rises, and perhaps even redundancies and lay-offs. At the same time, businesses facing extra costs will undoubtedly raise prices, fuelling (don't we love it?) inflation.
All of which has an impact on general affordability – and that includes the affordability of tenants, as well as landlords who are in many cases just doing the best they can to manage rising costs.
Planning Reform and Housebuilding
The government pledged to build 1.5 million new homes over the course of this five-year parliament, and the reforms to the National Planning Policy Framework (NPPF) and a modernisation of Green Belt policies is perhaps set to make this a 'near miss'... which is miles closer than successive governments have come since the late 1960s.
It is estimated that we will see around 1.3 million new homes over the period. At the same time, Reeves yesterday pledged an extra £2billion boost to building affordable properties, to further push this housebuilding agenda.
It is easy to take these things with a pinch of salt – but, in this case, the Office for Budget Responsibility (OBR) – an independent body that reviews government spending policies – has supported the claim, and has forecast that this housebuilding initiative will benefit the economy by adding 0.2% to GDP on its own – an economic boost of almost £7billion.
What does this mean for the rental market? It means a likely increase in rental stock, for a start, and from a landlord’s point of view it will mean a modest increase in property values, which the OBR says will rise by 2.8% in 2025, then by 2.5% per year until levelling off and dropping a little – 0.8% – in 2029. By this point, housebuilding volume should start to impact property stock levels available to both buyers and renters, easing pressure on supply.
For what it’s worth, the OBR also predicts a large increase in the volume of property transactions, from 290,000 per quarter to 370,000 per quarter – an increase of 320,000 property sales per year. As more homes come to market, this could open up more rental options and potentially slow down rental growth in oversupplied areas.
Meanwhile however, mortgage rates are set to rise again, with the average mortgage rate peaking at 4.7% in 2028, and remaining the same until 2030. This is likely to affect the amount that households save – currently 6.25% of disposable incomes, but likely to fall to 3.35% by 2030. For landlords with mortgages, this means higher costs, potentially leading to increased rents. For tenants, it could also mean fewer opportunities to save for a deposit, extending their time in the rental sector.
So, what now for tenants and landlords in South London?
The Spring Statement may not have delivered headline-grabbing fiscal changes, but its wider economic signals are worth paying attention to – particularly in the rental market. For tenants, rising costs and shrinking disposable incomes could make affordability increasingly challenging. For landlords, higher interest rates and inflation-driven expenses will continue to put pressure on margins.
On the other hand, the government’s housebuilding commitments could gradually improve rental stock and ease supply-side pressures, though it does remain to be seen whether the pace and delivery of these promises will bear out.
Ultimately, whether you're renting or letting, this is a time to focus on long-term goals. Tenants may need to plan more carefully around affordability and savings. Landlords, meanwhile, should keep a close eye on the market, review mortgage arrangements, and consider the quality and sustainability of their rental offerings.
