The 2026 Autumn Budget has introduced higher wage bills for employers, alongside a mix of cost-related measures and policy updates that drew a measured reaction across the construction supply chain, with many noting the lack of capital investment or any initiative to ‘jumpstart’ the construction and housebuilding sectors.
The Chancellor confirmed that long-term capital investment plans remain unchanged, with £39bn allocated for social housing in England over the decade from 2026 to 2036. An additional £1.5bn has been committed to the Warm Homes Plan, although details on how this money will be used are still to come. The government also confirmed that the Energy Company Obligation will end in March 2026, which may temporarily affect retrofit and energy-efficiency activity until the Warm Homes Plan is fully outlined.
Although not a direct housing policy, the rise in the National Living Wage will add to labour costs for housebuilders. These announcements sit alongside the forthcoming Planning and Infrastructure Bill, which is close to Royal Assent and is expected to work with the new planning investment to support housing delivery.
For a sector that has spent months waiting for clarity and certainty, the Budget did provide some direction and lacked the income tax rises that were previously feared, although many industry voices urged the government to go further.
Professor Noble Francis, CPA Economics Director, said: “With speculation in advance of the Autumn Budget at an all-time high the Budget couldn’t come quickly enough, if only to get rid of the uncertainty that had negatively affected homebuyers, home movers, the supply chain, clients and investors.
“The Budget tax rises were backend-loaded towards the end of the parliament and not matched by spending cuts, which may be of concern to financial markets. However, on the positive side, the government did not make the same mistake as last year, when the burden fell largely on businesses through increases in employers’ National Insurance Contributions.”
The government has also published its response to the Landfill Tax, confirming that it will not transition to a single rate of Landfill Tax by 2030, though the lower rate will essentially double to £8.65 per tonne in 2026/27.
John Newcomb, CEO of the Builders’ Merchants Federation, said: “We needed to see a jumpstart to get the sector moving. The Budget has not done enough to bridge the gulf between the Government’s ambition to build 1.5 million new homes by July 2029, and the state of today’s market. There’s a significant gap between what the Government has proposed and what is being achieved out on the ground. Without Government intervention it was going to be difficult to move out of a stagnant market, so it’s disappointing to see no incentives to help first-time buyers and stimulate the housing market.”
Rachel Hughes, Director of Marketing at wienerberger UK and Ireland, added: “If the country truly wants to accelerate housing delivery and unlock growth, it will take more than ambition. It will take a planning system with capacity, a supply chain with confidence, and a clear, stable commitment to building. Good intentions alone won’t deliver the scale of building Britain needs. We welcome the promise of further funding to increase planning capacity through a new skills offer.”
Kevin Wellman, Chief Executive Officer of the CIPHE, said: “The CIPHE supports the government’s focus on funding apprenticeships and pathways into the industry. [The] announcement of apprenticeship support for SMEs signals that the government is finally recognising the value of apprenticeships. It’s now critical that it continues its engagement and collaboration with the sector.”