Budget Autumn 2025 discussion - how the housing market shapes cities

Above: view of Eddington housing development, north east Cambridge (courtesy of the University of Cambridge)

Future Cities Forum's Autumn Budget 2025 discussion will discuss the UK government's plans for the economy, with a focus on its house building programme and how this will affect the burden of new homes targets, particularly in science cities.

Cambridge City Council has welcomed the Government's recent announcement of £400 million to solve some of the infrastructure issues that are hampering housing development. It reports that councils in Cambridgeshire say that the 'lack of water supply and infrastructure to deal with wastewater is already insufficient to ensure all the current locally planned high quality new communities and homes can be delivered.'

All areas of the country are tackling new homes targets, but it in our over-heating science cities the pressure is intense to provide a variety of new housing. The UK government has put emphasis on the construction, infrastructure and housing sector to support a growing economy, but the pressure of meeting targets remains.

Looking at how it can reform the tax system and make better use of existing housing stock is thought to be an element being considered by the Government for the Autumn Budget. How to incentivise through tax reform and extending VAT exemptions, as well as the investment in the quality of existing homes are further ideas. The Government hopes that these measures will support a fairer society as well as boosting the economy.

The Chartered Institute of Housing states:

'CIH has submitted its recommendations ahead of the Autumn Budget, urging the UK government to take urgent action to address immediate pressures in the housing system while building on the foundations of recent investment commitments. 

'We welcome the government’s pledge in the June Spending Review to deliver 1.5 million new homes, alongside £39 billion investment in social and affordable housing. But while this long-term commitment is vital, millions of people face urgent housing pressures today.

'Homelessness is at record levels, with over 131,000 households — including almost 170,000 children — stuck in unsuitable temporary accommodation. Supported housing providers face unprecedented strain, while the private rented sector remains unaffordable for many on low incomes.'

While the BBC says:

'Reports suggest the government may reform property taxes. It could replace stamp duty - a tax buyers pay on properties above a certain value in England and Northern Ireland - with a property tax. Landlords could have to pay more taxes, and council tax could be replaced. Some people selling their main residence may have to pay capital gains tax (CGT).'

The Local Government Association - in a letter to the UK government - advises that in order to increase further the supply and quality of affordable housing it should take the following steps:

• Make the Public Works Loan Board preferential borrowing rates for social housing permanent. Extend this to councils without housing revenue accounts (HRAs).

• Allow local authorities to have access to the £2.5 billion of low-interest loans for social housing providers announced at the Spending Review 2025.

• Continue to invest in the One Public Estate programme, Brownfield Land Release Fund and the Local Authority Housing Fund and commit multi-year funding to the Council Housebuilding Support Service.

• Amend the New Burdens doctrine so that all new burdens placed on local authority HRAs – including proposals for a revised Decent Homes Standard and Minimum Energy Efficiency Standards – are fully assessed and funded.

• Implement rent convergence from April 2026 at a minimum of £2 per week until all properties have reached formula rents.

  
  

How new homes will be built in science cities over the next few years remains an topic of great interest. Cambridge City Council and South Cambridgeshire District Council warn - on the recently announced Government investment of £400 million - that further discussion and details are now needed to understand the Government's intentions and to ensure it supports local priorities:

'The Government announced (23 October) their intention to consult on setting up a centrally-led Development Corporation to help plan, manage, and deliver large-scale development projects in Greater Cambridge.

'Both councils will work with Government to ensure decisions on the precise form and purpose that any development corporation takes are shaped and informed by good evidence and input from the democratically elected and accountable leaders for the area. Once more information is known the Government will consult local residents on setting up a development corporation, allowing local voices to be heard.'

Cllr Bridget Smith, Leader of South Cambridgeshire District Council, said:

“We have lobbied successive governments for national support on the infrastructure we need, including on wastewater and water supply. We’ve also made clear time and time again the challenges our local area faces when it comes to traffic and public transport. Getting this right is a top priority if we are to continue to ensure Greater Cambridge is a great place to live, grow-up, work and learn

“We recognise that a Development Corporation’s capabilities, including the ability to call upon the resources of the Government, do potentially provide a means to address some of these challenges but it’s key that local voices shape any decisions about our area.

“An intention to also increase the number of truly affordable homes is also very welcome but, like any announcement of this kind, we need to understand the detail that sits behind it and how it can become a reality. It’s also personally very welcome that ministers have recognised our advocacy for growth in a way that protects more land for nature and will soon be setting out plans for a new forest locally.'