Growing uncertainty ahead of the Autumn Budget has triggered a marked drop in confidence among UK housebuilders, with many delaying new projects amid fears of fresh property taxes, rising costs and continued planning delays, according to new research from specialist lender Octane Capital.
A survey of UK developers commissioned ahead of the Autumn Statement found that 64% are not confident about starting new residential schemes over the next 12 months, while a further 28% say they are only “cautiously confident”.
Just 8% reported that their development pipeline is progressing as normal, suggesting that speculation over tax changes is already feeding through to delivery.
Concerns centre on potential new levies on high-value property and development land.
TAX CONCERNS
More than a quarter (28%) of developers said they were very worried about the prospect of an annual or land-value tax, while another 35% said they shared those concerns but the impact would depend on the final thresholds and rates.
Uncertainty around Capital Gains Tax is also weighing heavily. Some 43% of developers said that increases to CGT or new charges on corporate property disposals would prompt them to delay sales, slowing turnover and constraining the pace of future development.
Nearly a quarter (23%) said they would instead seek to accelerate disposals ahead of any changes, illustrating how Budget speculation alone is prompting developers to rethink their strategies.
PLANNING BARRIERS
Despite the focus on tax, most developers continue to see the planning system as the biggest single barrier to increasing housing supply.
More than half (54%) said reforming planning would deliver the greatest progress towards the Government’s target of 1.5 million new homes, compared with 14% who favoured lower stamp duty or land transaction costs, another 14% backing tax relief on land acquisition or build costs, and 9% arguing for cheaper development finance.
“Nearly half said deeper structural challenges around funding and taxation would continue to restrict delivery.”
When asked how much a reduction in levies or streamlined planning rules would influence their confidence, just over half said it would help – with 16% saying it would make a significant difference and 36% saying it would slightly improve viability.
However, 48% said deeper structural challenges around funding and taxation would continue to restrict delivery regardless.
Looking ahead, almost half (48%) expect the Autumn Budget to reduce development activity in 2026. Only 15% believe the measures will support the sector.
HOLDING PATTERN
Jonathan Samuels (mina picture, inset), chief executive of Octane Capital, said: “Confidence among developers has clearly weakened ahead of the Autumn Budget, and it’s easy to see why.
“Speculation around new taxes, higher capital gains charges, or potential land levies is creating a holding pattern across much of the sector. Developers thrive on certainty, but right now that’s in short supply.
“If the Government truly wants to hit its housing targets, it must focus on measures that support delivery – whether that’s cutting bureaucracy, reducing transaction costs, or widening access to development funding.”
