What's Happening?
Chancellor Rachel Reeves is set to unveil the Autumn Budget on November 26, with potential tax hikes that could affect the construction industry. The Construction Products Association (CPA) has expressed concerns that these tax increases could impact
homebuyer confidence, economic growth, and unemployment. The CPA forecasts that housebuilding will remain flat this year and may rise by 4% in 2026, but risks are heavily weighted to the downside due to potential tax increases. The industry is calling for government support, particularly for first-time buyers, to prevent insolvencies that could damage skills and capacity throughout the construction supply chain.
Why It's Important?
The construction industry is a significant contributor to the UK economy, and any changes in tax policy could have widespread effects. Increased taxes may lead to reduced investment in housebuilding, affecting affordability and buyer confidence. This could result in slower economic growth and higher unemployment rates. The industry is urging the government to implement measures to support first-time buyers and stimulate demand, which is crucial for a sustained recovery in housebuilding. Without these measures, the sector may face challenges in maintaining its workforce and capacity, impacting future growth.
What's Next?
The industry is awaiting the details of the Autumn Budget, hoping for positive signals from the government regarding infrastructure investment and support for housebuilding. The CPA and other industry leaders are advocating for tax reliefs and incentives to boost demand and stimulate lender competition. The government’s decisions in the upcoming budget will be crucial in determining the future trajectory of the construction sector and its ability to recover and grow.
