here<\/a>.<\/p>\nBut how will UK construction be affected?<\/p>\n
Key points for UK construction in the Autumn 2025 budget:<\/h3>\nRaising of taxes<\/h4>\n
Several taxes are set to be raised, including a raise of fuel duty from 2026, costing a further \u00a32.4bn next year, and \u00a3900m each year afterwards, as well as a freeze of tax thresholds for both personal and employer National Insurance contributions thresholds from 2028-29, raising \u00a38bn.<\/p>\n
A further change of tax administration, compliance, and debt collection measures, will see \u00a32.3bn raised.<\/p>\n
The levy for Sizewell C will also be raised.<\/p>\n
For skills, Reeves announced \u00a313bn to be devolved to local mayors, supporting construction skills and developing infrastructure.<\/p>\n
Mansion tax was also announced, taxing homeowners whose property is valued at \u00a32m or more a yearly charge of \u00a32,500.<\/p>\n
Support for businesses<\/h4>\n
Corporation tax rates are to remain untouched, while the eligibility for enterprise incentives for scaling up businesses are to be widened, allowing more businesses to easily scale up.<\/p>\n
Furthermore, Reeves also mentioned a first year business allowance of 40% tax relief.<\/p>\n
The minimum wage is due to increase by 6% for apprentices<\/h4>\n
The new minimum wages from April 2026 will see over 21’s pay rising by 4.1% to \u00a312.71, 18-20 year olds seeing the highest rise of 8% to \u00a310.85 and under-18s and apprentices going from \u00a37.55 to \u00a38.<\/p>\n
“Getting spades in the ground and cranes in the sky”<\/h4>\n
Several projects were mentioned to keep their full investments, including Sizewell C, the Lower Thames Crossing, investments in city region transports, the Midlands Rails Hub, and the Northern Growth Corridor.<\/p>\n
Also mentioned was the Leeds City Fund, and the Peterborough Sports Quarter.<\/p>\n
The industry responds<\/h3>\n
John Wilkinson, COO at BAM UK and Ireland, said: <\/strong>\u201cWe welcome the Autumn Budget\u2019s commitment to easing pressures on households, but short-term relief must not overshadow the long-term investment Britain needs.<\/p>\n“Infrastructure is the backbone of economic resilience. Without sustained funding dedicated to improving infrastructure, the benefits of today\u2019s measures will quickly fade. Crucially, energy bills will not fall long-term unless major energy projects can move forward with fewer barriers to delivery, supported by a more efficient planning system.<\/p>\n
“Multi-year capital commitments give businesses the confidence to plan, invest and deliver. They create jobs, strengthen supply chains and drive regional growth. We urge the government to keep momentum behind major projects and ensure infrastructure remains a priority alongside consumer support.<\/p>\n
\u201cBusinesses and households have faced unprecedented cost pressures and uncertainty in recent years. The construction industry, in particular, operates on tight margins while contributing \u00a3138\u202fbillion to the UK economy.<\/p>\n
“With inflation high, unemployment rising, and economic growth sluggish, restoring confidence is more urgent than ever if we want to get Britain building again. That means simpler rules, clearer regulations, and fewer barriers to infrastructure projects that deliver jobs, energy, and growth, backed by incentives, not tax hikes.<\/p>\n
\u201cTo deliver on our commitment to \u2018building a sustainable tomorrow\u2019, we\u2019ve made our entire car fleet fully electric. Taxing EVs would be a major setback, discouraging businesses from investing in greener technologies. Across the UK, companies are already struggling with rising costs, sluggish growth, and inflation, another tax would only add to that burden. With the government aiming to end sales of new petrol and diesel cars by 2030, now is the time for incentives, not penalties, to accelerate the transition to a cleaner, greener future.<\/p>\n
\u201cThe UK construction industry is facing a severe skills shortage, with over 140,000 vacancies unfilled. To deliver the infrastructure and energy projects that drive our economy, create jobs, and reduce energy bills, attracting talent is critical. The right benefits, from pensions to cycle-to-work schemes are essential to drawing the best people. The government must create an environment that allows businesses to offer packages that truly support the industry. Less red tape and lower costs are vital if we want a thriving construction sector and sustainable job growth.<\/p>\n
“The promise of streamlined planning and funding for new homes is positive, but homes do not exist in isolation. Thriving communities need schools, healthcare facilities, transport links and utilities. Building houses without the supporting infrastructure risks building homes without building and improving society. The Government must take a holistic approach: development and infrastructure together, not one at the expense of the other.<\/p>\n
“At BAM UK & Ireland, we stand ready to deliver the sustainable infrastructure Britain needs. With the right commitments, we can help turn today\u2019s ambitions into tomorrow\u2019s reality.\u201d<\/p>\n
Allan Wilen, Economics Director at Glenigan, said:<\/strong> \u201cWe all knew the Chancellor needed to ensure the Government\u2019s finances appear on a firm footing, and she made the most of the situation to do so. It is welcome that the Chancellor also reiterated the Government\u2019s commitment to \u00a3120 billion of capital investment previously set out in the Spending Review. But it\u2019s vital the government rapidly delivers on these commitments and does not damage already fragile investor confidence, both for the UK construction sector\u2019s survival and to ensure stronger UK productivity and economic growth. That, for me, has to be the primary objective.<\/p>\n\u201cThe situation\u2019s pretty serious, as much as it\u2019s been downplayed this afternoon. Without increased investment, the UK will not secure the economic and productivity growth needed to deliver a rise in living standards and to improve the Government\u2019s own finances over the longer term. There is a danger that the plethora of new taxes announced by the Chancellor may deter private sector investment and frustrate other government objectives.<\/p>\n
\u201cThe new property tax on higher value homes, whilst targeting the top end of the property market, could have a disproportionately disruptive impact on the wider housing market. \u00a0This could deter new house construction, especially in parts of the UK such as London, where property prices are highest. This will throw a spanner in the works regarding the Government\u2019s ambitious housing target, especially when there\u2019s an increasing movement of people looking to live in the capital.<\/p>\n
\u201cDrawing on what I\u2019ve heard from those at the frontline of UK construction and real estate, Stamp Duty has been repeatedly raised as a distinct blocker to shifting the current stagnation within the property market. For a government looking at all opportunities to balance the books yet deliver a fluid and prosperous residential market, it must be time to listen to the built environment sector and look at some of the current measures that are stifling buying and selling movement in the property market and, in turn, deterring related investment.\u201d<\/p>\n
Olivia Harris, chief executive of Dolphin Living, said:<\/strong> \u201cThe introduction of a \u201cMansion Tax\u201d on homes above \u00a32m offers an opportunity to support affordable housing delivery across London, but only if local authorities have the ability to retain the revenue to spend on affordable housing delivery. As such, the government urgently needs to reconsider its position of directing this additional revenue back to the Treasury and ensure this tax on expensive housing is redirected towards delivering more affordable housing in locations where high value housing is prevalent and affordability challenges are greatest.\u201d<\/p>\nElle Cass, head of strategic built environment growth at SLR Consulting, said:<\/strong> \u201cToday\u2019s announcements show a clear intent to accelerate housing delivery, and that intent is welcome. But meeting the country\u2019s ambitions will require more than isolated policy levers. The planning system only works when accountability, consistency and capacity move together. The requirement for councils to notify government before rejecting major schemes is a sensible step in that direction. If it encourages committees to pause, reflect and align decisions with national housing goals, it will strengthen rather than undermine local decision making.<\/p>\n\u201cAt the same time, efforts to streamline applications need to focus on the real causes of delay. Removing statutory consultees risks treating the symptom rather than the root problem. Consultees provide vital expertise; the issue is that most simply do not have the resources to respond in a timely or meaningful way. Improving deadlines, capacity and feedback quality would achieve far more than cutting them out. A system can be faster, but it must also remain sound.<\/p>\n
\u201cThe reaffirmed \u2018default yes\u2019 for homes near train stations has real potential to shift the dial, but only if government is brave enough to apply it to rural green belt stations too. These sites are a missed opportunity under current rules. Evidence shows that building sensitively within 1,000 metres of rural stations could deliver substantial housing with minimal impact on the green belt, while supporting rail-based living, reducing leapfrogging and potentially unlocking investment for brownfield regeneration. This, in turn, can create new urban green spaces, improving green connectivity and access to such spaces in currently deprived areas, positively impacting the climate and providing opportunities for nature recovery and carbon sequestration. This is where strategic thinking can generate both environmental and social benefits.<\/p>\n
\u201cFinally, none of this will deliver meaningful change if households cannot access mortgages. We are in an increasingly unsustainable situation where renting often costs more than buying. More flexible mortgage products, including longer-term or lifetime models, would help people into home ownership and underpin the financial viability needed to bring new developments forward.<\/p>\n
\u201cOverall, the Budget sets out the right areas of focus, but the real test will be implementation. Planning, housing delivery, green belt policy and mortgage accessibility are deeply interconnected. If government delivers these reforms in a way that recognises that interdependence, we have a real opportunity to create places that work economically, socially and environmentally.\u201d<\/p>\n
Sarah Conibeere, partner at Fladgate, said: <\/b>\u201cIn our experience levels of council tax have no real impact on people\u2019s decisions to purchase a property and are just seen as a generic running cost, such as utility bills. Given the rating values were last reviewed in 1991 this does not seem a particularly unfair adjustment. On average council tax in London is around \u00a32,500 per annum – now a higher level of council tax will be charged on properties valued over \u00a32m from 2028. At this point, we do not know how the new property valuations will be calculated and what the new \u2018high value council tax surcharge\u2019 will actually be, but it will not act as a deterrent to HNW\/UHNW clients purchasing in prime central London.<\/p>\n
\u201cAdditionally, given that SDLT or CGT do not seem to have been touched, the fear factors currently holding back the prime central London market have fallen away and we anticipate a busy end of year!\u201d<\/p>\n
“How will we hit the 1.5m home target?”<\/h3>\n
Sean Keyes, CEO, Sutcliffe, said:<\/strong> “I would ask how we will hit the 1.5m home targets that will ultimately improve health, education and financial inequalities in the UK? For those in the construction sector this is a major pillar of our future.\u201d<\/p>\n\u201cThe Chancellor speaks of growth and stability, businesses are left wondering how we’re meant to deliver it when employment costs have just been substantially increased. The last budget saw a 1.2% rise in employer National Insurance, combined with a \u00a34,100 drop in the threshold and a 6.7% increase in the National Living Wage, represents a significant hit to labour-intensive sectors like construction \u2013 precisely the industries expected to deliver the government’s ambitious housing and infrastructure targets.<\/p>\n
“Make no mistake, these costs don’t simply disappear into company accounts. After 40 years in this business, I can tell you exactly what happens: firms will have to make difficult choices about recruitment, pay rises will be constrained, and some projects will need repricing. For a construction company employing hundreds of people, we’re all looking at substantial additional costs at a time when we’re being asked to scale up delivery, not scale back.<\/p>\n
“You cannot simultaneously increase the cost of employment whilst calling for economic growth \u2013 something has to give. The infrastructure investment announced is welcome, but it needs businesses with the capacity and financial headroom to deliver it. This Budget makes that harder, not easier.”<\/p>\n
Alexander Marcham, managing director at Alvarez & Marsal Tax, said<\/strong>: \u201cCurrent Council Tax bandings are still based on 1991 values, which often bear little resemblance to today\u2019s market. Delivering this reform as planned would effectively require a full revaluation of every property in the country to 2026 levels \u2013 a huge administrative task that likely explains why implementation has been pushed to 2028.<\/p>\nEven the OBR acknowledges the risk of widespread behavioural responses and a flood of appeals. One local council officer recently told me that a surge in appeals at this scale could \u2018break the national valuation system\u2019 – and that risk cannot be taken lightly. For a government seeking growth, a policy that could overwhelm the valuation system and further freeze a fragile housing market looks like a very high price for very limited gain.\u201d<\/p>\n
Phil Hooper, CEO of Close Brothers Property Finance, said: <\/strong>\u201cIt\u2019s extremely disappointing that the Government has missed an opportunity to support the housebuilding industry through a new equity loan scheme.<\/p>\n\u201cThe Government is holding up the Mortgage Guarantee Scheme as its flagship policy to support first-time buyers, but the numbers tell a different story. Since launching four years ago, the Scheme has accounted for just 1% of all new mortgages.<\/p>\n
\u201cThe downturn in the new homes sales market is the single biggest issue for SME housebuilders at the minute and it\u2019s preventing them from being able to scale up their output. We\u2019ve seen volume housebuilders take matters into their own hands by launching their own versions of equity loan schemes. Unfortunately, this isn\u2019t an option for SMEs who don\u2019t have that kind of financial firepower. SMEs have always been at a competitive disadvantage to the PLCs and the gap between them is only going to grow wider at this rate. Without targeted intervention, we risk losing the very businesses that are building the high-quality homes that the country desperately needs.\u201d<\/p>\n
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